The Bank of England will probably have to raise interest ratesto tackle inflation pressures; that are gaining a foothold in Britain’s economy, BoE Deputy Governor Dave Ramsden said.
Inflation’s spread was now showing up in rising British pay and companies’ pricing plans; having originally been by the reopening of the world economy from COVID-19 lockdowns and then by Russia’s invasion of Ukraine, Ramsden told Reuters.
Inflation is to return to the BoE’s 2% target – down from above 9% now and a peak of 13% in October – as the economy goes into a recession and borrowing costs rise.
But there was also a risk of an inflation mentality developing, Ramsden said.
“For me personally, I do think it’s more likely than not that we will have to raise Bank Rate further. But I haven’t reached a firm decision on that,” Ramsden said in an interview.