LONDON, Nov 28 (Reuters) - Bank of England Chief Economist
Andy Haldane said inflation could rise by more than expected as
progress on COVID-19 vaccines and huge amounts of stimulus
raised the chances of a swift economic bounce-back.
"As the economic recovery gathers pace next year, it will be
important central banks remain squarely focussed on their core
medium-term price stability mandates," Haldane said in a speech
to a University College London webinar on Saturday.
Haldane has consistently sounded more upbeat than his fellow
interest-rate setters about the prospects for an economic
recovery in Britain after the record 25% slump triggered by the
first coronavirus lockdown in the spring.
The BoE's nine-member Monetary Policy Committee has stressed
that it will not be in a hurry to tighten monetary policy by
saying it first wanted to see clear evidence of "significant
progress" to hitting its 2% inflation target sustainably.
Haldane said recent news of progress with the development of
COVID-19 vaccines "offers some economic light at the end of the
long, dark tunnel of this year" and there could be a rapid
economic recovery in Britain and globally.
"Taken together with the huge amounts of policy stimulus
provided this year, this will in my view leave risks to the
economic outlook more evenly balanced than for some time,
including risks to inflation over the medium term," he said.
Britain's most recent consumer price index showed inflation
Haldane focused most of his speech on central bank
independence and said the blurring of the distinction in some
people's minds between governments and central banks had been
reflected partly in a fall in public trust in central banks.
"These developments underscore the crucial importance of
efforts to improve public understanding of the economy,
financial system and build trust in central banks role in
supporting both," he said.
(Writing by William Schomberg; editing by Sarah Young)