BOE May Bear Temporary Above-Target Inflation to Support UK, Bailey Says

The Bank of England could temporarily tolerate inflation staying above its 2% target in order to support the UK’s weak economy, Governor Andrew Bailey said, so long as second-round price effects do not emerge.

“Given the context of softness in the real economy and uncertainty around the scale and duration of the shock, tolerating temporarily above-target inflation to provide some support for the real economy is an appropriate way to approach the trade-off,” Bailey said at an economic conference in Reykjavík, Iceland.

(Source: Bloomberg)