LONDON (Reuters) - Bank of England Governor Mark Carney said on Tuesday the central bank still had to balance the need to support job creation and growth with an inflation rate that is running above its target.
“Inflation rising potentially above the 3 percent level in coming months is something that we have anticipated,” Carney told MPs in parliament, saying the Bank had said before last year’s Brexit vote that a fall in sterling would push up prices.
“As a consequence we faced a trade-off, and we still face a trade-off, between having inflation above target and the need to support, or the desirability of supporting, jobs and activity.”
The Bank has said most of its rate-setters think they will need to raise interest rates “in the coming months” to head off a build-up of inflation pressure. Carney has previously said he is part of that majority.
Earlier on Tuesday, official data showed Britain’s inflation rate hit 3 percent, above the Bank’s 2 percent target. Much of the increase however has been caused by the fall in the value of the pound since last year’s Brexit vote which is likely to be a temporary driver of price increases.
Reporting by David Milliken; Writing by William Schomberg; editing by Stephen Addison