Bank of England must contain inflation

LONDON. Bank of England Governor Andrew Bailey sent a fresh signal yesterday that the British central bank is gearing up to raise interest rates for the first time since the onset of the coronavirus crisis as inflation risks mount.

Bailey said he continued to believe that the rise in inflation would be temporary, but the recent surge in energy prices would push it higher and make its climb last longer, raising the risk of higher inflation expectations.

“Monetary policy cannot solve supply-side problems — but it will have to act and must do so if we see a risk, particularly to medium-term inflation and to mediumterm inflation expectations,” Bailey said during an online panel discussion organised by the Group of 30 consultative group.