LONDON (MNI) – After Tuesday’s data showed core inflation nudged up
in March, Bank of England Monetary Policy Committee member Adam Posen
said the MPC ought to rethink if it doesn’t come down on a sustained
basis.
Core inflation ticked up to 2.5% in March from 2.4% in February,
the first rise since October 2011. Posen, who led the way on the second
wave of quantitative easing, stressed that this was only one month’s
data.
“If core inflation doesnt come down on a sustained basis then we
ought to rethink,” Posen said.
“One month’s data point, even one quarter’s data point, doesn’t
change the view. But it does say what we have always said, which is we
have to watch what’s happening,” he added.
“And I think when you look at the minutes (of the April MPC
meeting) tomorrow you will see we are very aware of that,” he said.
The BOE does not publish a forecast for core inflation, but its
forecast for headline CPI inflation turned out to be too low for the
first quarter of this year.
The March figures meant that CPI inflation stood at 3.5% in the
first quarter, above the 3.35% central projection in the Bank of
England’s February Inflation Report.
Posen, following a speech at the London School of Economics,
refused to give a comment on other recent economic data or say
anything substantial on renewed Eurozone turmoil but restated his view
that “the (ECB’s) LTROs helped take out some of the tail-risk”.
–London newsroom: 4420 7862 7492; email:
dthomas@marketnews.com/drobinson@marketnews.com
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