The Outlook For Inflation − Speech By Clare Lombardelli, Bank Of England Deputy Governor, Monetary Policy, Given At The Sixth Biennial Conference On Macroeconomic Policy, Warsaw

In this speech Clare sets out the outlook for inflation. She describes the framework the Monetary Policy Committee is using to monitor and learn how recent energy price increases will affect inflationary pressures. She considers the size and volatility of the energy shock, the response of the UK economy, and the underlying inflationary dynamics. Monetary policy is already leaning against the risk of persistent inflationary pressures and will be tightened further if needed.

Clare Lombardelli

Deputy Governor, Monetary Policy

Speech

It is an honour and a pleasure to be invited to speak to you today at the Sixth Biennial Conference on Macroeconomic Policy.

Policymakers often say we are dealing with an unusually uncertain time. And I will not disappoint you. The economy faces large and complex uncertainties: geopolitical tensions, global structural shifts and the rapid march of technology. The world is changing, and those changes are interacting, with significant implications for inflation.

Today I will discuss the global energy shock and its implications for inflation and monetary policy. I will first review the framework that the Monetary Policy Committee (MPC) is using to assess how the global energy shock is affecting UK inflation. I will then assess the near- and medium-term outlook before discussing what it means for policy, both through the lens of the Committee’s recent decisions and my own perspective. I have three main messages.

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