March 7 (Bloomberg) -- Bank of England Chief Economist Spencer Dale said he expects U.K. inflation to slow to the central bank’s 2 percent target by the end of the year, easing the squeeze on Britons.
“With high inflation their ability to spend in the shops has been squeezed and hopefully that pressure will start to ease and people will start to feel better,” Dale said in an interview with BBC Radio Gloucestershire. The comments were originally broadcast on March 1.
“I think inflation will continue to fall” from its January level of 3.6 percent, which was a 14-month low, Dale said. “Hopefully inflation will gradually come back down over the rest of the year to our inflation target of 2 percent.”
Dale also said he has “huge empathy” with savers as the Bank of England continues to hold its benchmark interest rate at a record low of 0.5 percent.
“This is a group who did nothing in any way to fuel the financial crisis but who have suffered very significantly in bearing the burden of low interest rates,” he said. “We all stand to gain if we can get the economy back to a position of strong and sustainable growth with low and stable inflation.
‘‘Monetary policy, trying to stimulate the economy, is a key part of getting the economy back onto a stable and balanced path,’’ he said.
While there is ‘‘hope that we should start to get some pickup in growth’’ later this year, ‘‘things are still very uncertain, particularly for those who are exposed to what’s going on in the euro-area,’’ Dale said.
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