Bank of England Governor Andrew Bailey asked about implications of recent increase in Gilt yields on @BBCRadio4
Says: “Consistent with change in economic outlook”
i.e expectations of higher growth, rather than expectations of damaging inflation shock...
Says: “Consistent with change in economic outlook”
i.e expectations of higher growth, rather than expectations of damaging inflation shock...
Bailey adds:
“Some rise in interest rates which is a reflection of stronger growth in the economy would make the overall debt situation in the long run more sustainable”.
“Some rise in interest rates which is a reflection of stronger growth in the economy would make the overall debt situation in the long run more sustainable”.
Context: Gilt yields *are* up sharply this year - but note only up to pre-pandemic levels
Suggests normalisation, rather than market inflation panic...
Suggests normalisation, rather than market inflation panic...
Bailey's view consistent with Charlie Bean of the @OBR_UK who told TSC last week:
"What I wouldn't do is extrapolate from the recent couple of weeks to say: 'That is a trend that is going to continue, we will see markedly higher interest rates in the second half of this year'"
"What I wouldn't do is extrapolate from the recent couple of weeks to say: 'That is a trend that is going to continue, we will see markedly higher interest rates in the second half of this year'"
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