Andrew Bailey told an audience in Reykjavik, Iceland, that reacting too early to inflation concerns ‘may generate undesirable volatility’.

BoE Governor Andrew Bailey signals the central bank may let inflation exceed 2% temporarily to avoid recession, holding rates at 3.75% amid Middle East supply shocks.

Bailey has said the soft labour market might allow the Bank of England to avoid interest rate hikes if wages do not rise.

Andrew Bailey told an audience in Reykjavik, Iceland, that reacting too early to inflation concerns ‘may generate undesirable volatility’.

“Dado o contexto de fragilidade na economia real e a incerteza em relação à magnitude e duração do choque, tolerar temporariamente uma inflação acima da meta para fornecer algum…