FRANKFURT (Reuters) - Any delay in bringing inflation in Britain down to the Bank of England’s two percent target forces some cash-strapped consumers to choose which essential goods to buy, the BoE’s chief economist said in an interview published on Monday.
“Every delay gives many people a tough choice,” Andy Haldane told German daily Handelsblatt.
He recalled a 2017 encounter with consumers forced to choose between cutting down on food or heating.
“That made it very clear once again why it is so important to push inflation back to the target of 2 percent and not wait too long,” Haldane said.
He was in a minority of three on the BoE’s nine-member interest rate-setting committee who voted to raise rates to 0.75 percent last month.
Investors are trying to assess the chances of the British central bank raising rates in August, when it is likely to have a clearer idea about whether a slowdown in the economy in early 2018 was temporary or not.
Britain’s inflation rate stood at 2.4 percent in May, down from a peak of 3.1 percent in November but above the BoE’s two percent target.
Reporting By Francesco Canepa, Editing by Matthew Mpoke Bigg, William Maclean