UK minister defends wages stance, says BoE can handle inflation

Web DeskWeb Editor

11th Oct, 2021. 02:13 pm
Bank of England

LONDON: The British government is right to focus on driving up wages, Business Minister Kwasi Kwarteng said, expressing confidence in the Bank of England’s ability to curb rising inflation, Arab News reported.

BoE Governor Andrew Bailey has said he is concerned about inflation running above the bank’s target of 2 per cent, describing the need to prevent rising prices becoming permanently embedded.

During an interview with Times Radio focused on soaring energy costs and supply chain disruption caused by labour shortages, Kwarteng was asked whether the people should start preparing for an interest rate rise to tackle inflation.

“The bank is independent, and will take a view,” he said. “The bank’s principal motive will be to try and curb inflation, I think that they’re going to do a good job of that and we have to make sure that we can contain any rises in the cost of living.”

In its September policy statement, the BoE nudged up its forecast for inflation at the end of the year to over 4 per cent, and the bank’s chief economist has warned the size and duration of the jump is proving greater than expected.

But Kwarteng defended the Conservative government’s plans to transform Britain into a high-wage economy, as set out by Prime Minister Boris Johnson in a speech last week.

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