Source: Sharecast
Speaking at a European Central Bank panel talk on Monday, Dave Ramsden warned that inflation – currently at 3.8% – could rise slightly before peaking and falling back towards the target.
“We have seen the labour market continuing to loosen with wage growth normalising and I see that as supporting a continuation of the core disinflation process. And that anchors my view on the inflation outlook," he said.
Ramsden, who was the chief economic adviser to the Treasury before joining the BoE in 2017, said that he has been surprised by the length of time needed for wage-setting behaviour "to get back in line".
However, he said he remains "confident" that year-on-year price increases will slow to the 2% level.
"I think the gradual and careful approach that the [Monetary Policy Committee] have taken to removing policy restraint remains appropriate and I see scope for further removal of policy restraint looking ahead," Ramsden said.