Bank of England must have ‘laser focus’ on inflation – Haldane

FILE PHOTO: A man walks past a window reflecting the Bank of England, in London
FILE PHOTO: A man walks past a window reflecting the Bank of England, in London, Britain, December 17, 2020. REUTERS/Hannah McKay/File Photo

December 23, 2020

LONDON (Reuters) – The Bank of England must have a “laser focus” on keeping inflation expectations in check once the COVID-19 crisis eases, the central bank’s Chief Economist, Andy Haldane, said in an interview with Bloomberg.

“The last thing the world needs right now is a nasty inflation surprise,” Haldane said, echoing comments he made on Nov. 28.

The BoE said on Dec. 17 it is prepared to let inflation overshoot its 2% target temporarily.

Haldane told Bloomberg any overshoot could not become entrenched otherwise bond yields would rise, pushing up the cost of repayments on Britain’s 2 trillion-pound debt mountain and jeopardising any recovery.

He also said he was much more confident about the economy in the second half of 2021 than in the first quarter of the year because of the prospects for rolling out COVID-19 vaccines.

(Writing by William Schomberg; editing by Andrew Heavens)