BoE's Bailey says persistence of COVID means there has not been expected rebalancing of demand between goods and services, pushing inflation higher than expected
- Semiconductor shortage has led to shortage of new cars and pushing up second than car prices as well in UK.
- Higher than anticipated inflation underlines persistence of COVID.
- Overall economic impact of COVID in UK has attenuated.
- Seeing some short-term levelling off of recovery.
- Do not think inflation will be persistent.
- Think it is unlikely commodity prices will continue to rise.
- Expect supply bottlenecks to sort themselves out.
- Large concern is getting labour market vacancies filled.
- End of furlough scheme should help fill vaccines.
- He has a bit more concern regarding persistence of labour market pressures.
- Risks on both sides to inflation returning to target over medium term.
- Market curve does point to some increase in interest rates.
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