- We need to see the job through on inflation
- We need to ensure we do enough on policy
- But there is the possibility of doing too much in the fight against inflation
- Policy needs to be sufficiently restrictive for long enough
For the BOE, they need to be wary about the second-round effects of inflation especially since wages are running hot in the past few months. Stagflation risks are rising and that will make it extremely difficult for the BOE to try and navigate a soft landing on the economy.
This article was written by Justin Low at www.forexlive.com. Source