BoE officials deny complacency over second-round effects
First-round impact of shocks is driving the bulk of inflation, policy-makers say
Bank of England officials have sought to dispel concerns that they allowed “second-round effects” to become embedded in the inflation process.
Governor Andrew Bailey told a UK parliamentary committee today (February 9) that the BoE expects a “very powerful unwind” this year as year-old shocks – first-round effects – pass out of headline inflation. The central bank’s latest forecasts show inflation dropping from 10.5% in December to as low as 1.6% in the second quarter of 2024, below the 2%
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