Bank of England may ‘need to start turning off the tap’ of QE as the economy is going ‘gang-busters’ and inflation is rising

The outgoing chief economist of the Bank of England, Andy Haldane, has said that the UK economy may need less monetary support as it’s is going ‘gang-busters’ and inflation pressures are rising.

Haldane, said that from petrol and diesel to timber and cement, it was ‘hard to find anything whose price isn’t going up at the moment’.

Wages are also starting to rise, he said, but they need to rise further, and enough well-paid jobs also need to be created to get the economy moving and people off the furlough support and back into the world of work.

he also said that the current strong economic rebound meant that inflation may rocket, and the Bank of England should at some point begin to unwind its monetary support to stop it from doing so. 

‘If both pay and costs are picking up, inflation on the high street isn’t very far behind…. that may mean that at some stage we need to start turning off the tap when it comes to the monetary policy support we’ve been providing over the Covid crisis’.  

Haldane has been bullish about the UK economic recovery, saying it would bounce back like a ‘coiled spring’ after people rushed back to pubs, shops, hairdressers and gyms. Last month, he predicted that he economy will grow at its fastest since World War II. 

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