BOE’s Haldane Urges Laser Focus to Avoid ‘Nasty’ Inflation Shock

The Bank of England must have a “laser focus” on keeping inflation expectations in check after the pandemic, Chief Economist Andy Haldane said, highlighting the tricky balance the nation faces in managing its massive debt burden.

While the BOE is willing to let price growth temporarily overshoot its 2% target as the economy emerges from the current crisis, there can be no question of letting that sentiment become entrenched, he said. Any country that lets inflation expectations spike would see bond yields rise, boosting the cost of debt repayments and undermining the recovery.