Inflation: Bank of England governor warns price rises may last until 2023

The governor of the Bank of England Andrew Bailey voiced “concern” that the UK’s surging inflation outlook might get worse given surging energy costs and signs that cost pressures are feeding into wage demands. Bailey told MPs on the Treasury select committee that financial markets now do not expect energy prices to start easing back until the the second half of 2023. He also highlighted growing wage expectations, stating that the Bank's regional agents report seeing some evidence of second-round inflation effects. He says there is a concern that there could be "second round effects" on wages on both rising inflation and a "tight" jobs market. Read More: What higher inflation means for savers and investors "This a hard thing to say ... but if you get pressure on cost of living, pressure on real earnings, that will tend to restrain demand in the economy... and that could lead to an output gap opening up, and it could eventually of course lead to higher unemployment and that would bring inflation down," Bailey said. "I don’t want to suggest that... were we to consider it necessary, we don’t have to take any action in terms of the Bank of England’s action...

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