Bank of England Chief Economist Huw Pill said the British people need to accept they are poorer.
- “Somehow in the UK, someone needs to accept that they’re worse off and stop trying to maintain their real spending power by bidding up prices, whether higher wages or passing the energy costs through onto customers”
Pill said some of the pressures keeping inflation high are likely to dissipate in the coming months
- inflation may dip below the 2% target in 2 years
- “We’ve had a series of inflation shocks that just come one after the other,” he said. “Each of those shocks was in itself transitory, but they just were timed in a way that inflation never dissipated."
- Risk that monetary policy does too much
- inflation is making the UK as a whole worse off
Pill spoke on Tuesday, UK time.
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Bank of England Governor Bailey was lambasted for saying something similar:
