Besley says fighting inflation tough task
Bank of England monetary policy committee member Tim Besley said on Tuesday the Bank faced a difficult task in fine-tuning monetary policy to try to help the economy whilst also keeping inflation in check.
RBS profits up 9 percentWriting in The Sun newspaper, Besley said keeping inflation at a two percent target rate was "not easy in the current economic climate".
The Bank has already warned that inflation is likely to stay high stay even as economic growth remains flat, fuelling concerns that Britain may be heading for a recession.
Besley said that whilst price pressures continued, policy would have to be kept tight.
"This spiral has to be nipped in the bud and that means having interest rates at a suitable level until the threat of higher inflation has passed," he said.
"All being well, inflation will fall again next year and will be much closer to the two percent target by the end of 2009. But that will only happen if people don't chase inflationary wage increases."
(Reporting by Kate Kelland. Editing by Peter Griffiths)
|
|
