BOE governor Bailey says monetary policy cannot stop energy price shock on inflation
- The longer the Middle East conflict continues, the worse the impact will become
- Where we go from here will depend on the size and duration of energy price shock
- Monetary policy cannot stop higher energy prices from affecting UK economy, inflation
- Second-round effects build more slowly than direct and indirect effects
- That makes it a difficult judgement call in navigating monetary policy
- Policy setting cannot wait for conclusive evidence of second-round effects before responding
More to come..
This article was written by Justin Low at investinglive.com.