Bank of England’s Haldane warns inflation “tiger” is prowling

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© Reuters. A man looks towards skyscrapers of the City of London financial district as he crosses Waterloo Bridge in London

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By Andy Bruce

LONDON (Reuters) – of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the recovers from the COVID-19 pandemic, adding that central banks may need to respond.

In a clear break from other members of the Monetary Policy Committee are more relaxed about the for , Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.

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“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online.

“But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”

Haldane’s comments prompted British government bond prices to fall and sterling to rise as he warned that may not be adequately positioned for the risk of higher inflation.

“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial ,” Haldane said.

Source: Investing.com

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