Inflation warning from BoE Monetary Policy Committee member

The Bank of England’s current series of rate hikes may take longer to be felt than previous tightening cycles and may have limited impact on inflation in the very short term, Swati Dhingra, a member of the Bank of England’s (BoE) Monetary Policy Committee, said on Tuesday. The Bank of England’s current round of rate hikes may take longer to be felt than previous tightening cycles and may have limited impact on inflation in the very short term, Dhingra said. Speaking at Manchester Metropolitan University, Dhingra focused on the need to better measure price changes and corporate profits to fully understand how the economy responds to inflation shocks. “The delays in monetary policy transmission suggest there is little we can do to influence inflation in the near future. There is reason to suspect that policy transmission will be slower than in previous cycles,” Dhingra added. Noting that the BoE is committed to returning inflation to its 2% target, Dhingra said: “The cost of living crisis is not over. “Low and stable inflation is the best contribution monetary policy can make to macroeconomic outcomes and welfare,” he said.