Bank of England (BOE) policymaker Jonathon Haskel said that “an upside risk to the inflation forecast could arise from geopolitical events” during his testimony on the Monetary Policy Report (MPR) before Parliament's Treasury Committee on Wednesday.
Additional takeaways
To my mind there is a risk that high levels of inflation might lead to more sustained upward pressure on nominal wages than embedded in central projection.
There seems a material risk of further increases in global gas prices which would only add to the already considerable rises in CPI inflation.
There are downside risks to the MPR inflation forecast, which I currently judge more minor.
We have been surprised about how tight the labour market has been.
Forward-looking BOE inflation and wage surveys are a concern.
Decision to vote for 50 bp rate rise was finely balanced for me.
We need to be vigilant on inflation.
I was nervous about risk of temporary blip in inflation getting embedded.
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