Bank of England (BoE) Deputy Governor for Monetary Policy Ben Broadbent remarked on Thursday that it is still unclear if the institution must raise interest rates "as much as the market sees" to combat the rising trend in inflation.
In a speech given at Imperial College in London, Broadbent noted that much of the bank's decisions in the near future will depend on the British government's new economic measures, adding that the Monetary Policy Committee (MPC) is "likely to respond relatively promptly to news about fiscal policy." He pointed out a link between higher import prices and the newest rise in inflation, saying that "if government support mitigates the effect of import costs, there is more at the margin for monetary policy to do."
"There is now some uncertainty about the prospective scale and nature of the government’s energy subsidies. [...] We are unlikely to know for a while precisely the form that will take," he admitted while warning that "dropping the energy plan will boost inflation."
