King Says U.K. Faces Inflation Bout Plus Weak Growth
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Bank of England Governor Mervyn King said Britain faces a further bout of inflation and a muted economic recovery, and pledged officials will look through the volatility in prices to keep nurturing growth where they can.
“Inflation is likely to rise further in the near term and may remain above the 2 percent target for the next two years,” King said as he presented the central bank’s Inflation Report in London today. “The MPC’s remit is to deliver price stability in the medium term in a way that avoids undesirable volatility in output in the short run. The prospect of a further prolonged period of above-target inflation must therefore be considered alongside the weakness of the real economy.”