The Governor of the Bank of England has claimed that policymakers have been left helpless in the face of surging inflation.
Appearing in front of MPs, Andrew Bailey said he couldn’t anticipate the series of shocks that are responsible for driving inflation well past the Government’s 2% target.
He said he’d felt helpless to control soaring prices amid an energy market shock and the war in Ukraine, adding: “It’s a very, very difficult place for us to be in.”
He also warned that house price growth is likely to cool due to an increase in borrowing costs, but allayed fears of market difficulties due to the “structural” shortage of properties to buy which will support the market.
The central bank has been the target of criticism from some Conservative grandees of late.
Bailey said he didn’t respond to political comments, but admitted the Bank was facing the biggest test in its 25 years of independence.
Myron Jobson, senior personal finance analyst, interactive investor, said: “‘Helpless’ is the word Andrew Bailey used to describe how he felt amid runaway inflation which has battered household budgets, leaving many consumers feeling the same.
“The harsh reality is we all face a fresh squeeze on living standards in the coming months with inflation set to reach double digits. It is important to regularly review your spending habits to help ensure that you are living with within your means, and it is easier said than done for those struggling.
