The Bank of England said Wednesday that it will not hesitate to adjust interest rates “as much as necessary” to meet its 2% inflation target. The government issued a statement in an effort to calm the market, which has been turbulent since it announced a new fiscal policy on the 23rd, but the pound fell again as the market fell short of expectations.
Bank of England Governor Bailey said in a statement that the central bank is monitoring developments in financial markets “closely”. “We will not hesitate to change interest rates to the extent necessary to bring inflation back to the 2% target in a sustainable way over the medium term,” said the policymaker.
However, the Bank of England will take emergency measuresconjecture“At our next regular meeting, we will carefully assess the impact of the government announcement on demand and inflation, as well as the weakening of the pound, and act accordingly,” the bank said.
The pound fell 1.8% to $ 1.0663 at 4:47 pm London time on the 26th after the announcement. Speculation that a stronger statement would be imminent prompted the pound to reverse its temporary decline.
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BOE’s commitment to do what is necessary fails to calm the market’s nerves(extract)
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