Bank of England could raise rates faster, says governor Andrew Bailey

Bank of England could raise rates faster, says governor Andrew Bailey

Andrew Bailey, the governor of the Bank of England (BoE) has revealed that the bank is leaving “all options on the table”, including a 50 basis-point interest rate increase in an attempt to fight back against rising inflation.

Mr Bailey told an audience of global central bankers at the European Central Bank’s annual forum in Sintra, Portugal, that rate-setters would be open to more aggressive monetary tightening, despite the gradual rate rises seen throughout 2022.

Andrew Bailey said: “(It) leaves options on the table and that is very deliberate. I want people to take the message, as we respond to the (inflation) shock, that we want to have options on the table. There will be circumstances where we have to do more.”

The BoE has raised interest rates at its last five meetings, by 25 basis points. The latest increase was announced by Scottish Financial News earlier this month, taking the rate to 1.25%.

Mr Bailey added that he had not yet decided whether to vote for a 50 point increase, after three of the nine members of the monetary policy committee (MPC) supported larger increases in the two most recent rate-setting meetings.

The bank makes its next rate decision in early August, The Times reports.

Mr Bailey added that if inflation is more persistent, “then we will act more forcefully and we will have to.”

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