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Inflation Makes BoE’s Response to Higher Unemployment Difficult

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The Bank of England would be able to do more to counter a projected rise in unemployment were it not for a sharp increase in inflation pressure caused by sterling’s fall since June’s Brexit vote, Deputy Governor Ben Broadbent said on Friday.

Broadbent highlighted the trade-off the BoE faces between keeping “significant” inflation pressures under control without hurting employment.

“The MPC (Monetary Policy Committee) would be less inclined to accommodate above-target inflation if it didn’t also expect demand to fall slightly short of that supply potential,” Broadbent said in a speech to the Society of Business Economists in London.

Reuters

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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