Andrew Bailey admitted on Tuesday that the Bank of England was “wrong” about inflation, telling the House of Lords that it was “taking a lot longer” than expected to come down.
Following the release of more depressing figures for the public and interest rates set to rise again next week, Mr Bailey said: “As I’m afraid this morning’s numbers illustrate, we’ve got a very tight labour market.
“We still think the rate of inflation is going to come down, but it’s taking a lot longer than we expected.”
Bailey also said he was poised to launch a review into why the BoE has managed to get it so wrong on inflation, saying there were “big lessons” to be learned.
But as the nation grapples with everything from soaring mortgages, sky-high food bills, unaffordable childcare and through-the-roof energy bills, Mr Bailey’s words have fallen on unsympathetic ears.
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The latest comments are likely to fuel recent calls for Mr Bailey to resign from his post and free up the governor role for a fresh take.
Last month, a group of financial advisers called for his immediate resignation after the base rate was upped for the 12th consecutive time, reaching 4.5 percent, their highest level since the 2008 global crisis. And more is yet to come.
Samuel Mather-Holgate, independent financial adviser at Mather and Murray Financial, said: “A rate rise will negatively affect the property market that is already on shaky ground; the whole set up is a shambles and Andrew Bailey, governor of the Bank of England should resign.”
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