Mark Carney: Bank of England will
tolerate inflation overshoot Mark Carney has said this morning that
he is willing to tolerate an overshoot of the Bank of England’s 2% inflation target.
The governor’s comments suggest
the Bank’s policymakers will focus on supporting economic growth through low interest rates following the Brexit vote, rather than acting to bring inflation down.
Speaking at an event in Nottingham, Carney said: “Our judgment in the summer was that we could have seen another 400,000-500,000 people unemployed over the course of the next few years. So we’re willing to tolerate a bit of
overshoot in inflation over the course of the next few years in
order to avoid that situation, to cushion the blow.”
UK inflation was just 0.6% in August, well below the 2% target. But the Bank and other commentators have warned that inflation will soon start to rise as the sharp fall in the pound since the Brexit vote starts to feed through to higher import prices.