Growth in net energy importer nations likely to slow: Bank of England

The MPC sets monetary policy to meet the 2 per cent inflation target, and in a way that helps to sustain growth and employment.

The invasion of Ukraine by Russia has led to further large increases in energy and other commodity prices, including food prices. It is also likely to exacerbate global supply chain disruptions, and has increased the uncertainty around the economic outlook significantly, the bank said.

Twelve-month consumer price inflation rose from 5.4 per cent in December to 5.5 per cent in January. Inflation is expected to increase further in coming months, to around 8 per cent in the second quarter of this year, and perhaps even higher later this year, the bank said.

Based on its current assessment of the economic situation, the MPC judges that some further modest tightening in monetary policy may be appropriate in the coming months, but there are risks on both sides of that judgement depending on how medium-term prospects for inflation evolve.

ALCHEMPro News Desk (DS)