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Posen Says Bank Of England Has Serious Worries On Inflation: Report

Bank of England policymaker Adam Posen said the central bank has 'serious' worries over inflation, the London Evening Standard reported Thursday.

Though Posen expects inflation to fall back to the 2 percent target by the end of this year, he said the central bank's big concern is core inflation that excludes indirect taxes and energy prices. The figure has been above 3 percent for much of last year.

"The committee is taking this very seriously and we are actively discussing it," Posen told the newspaper. He expressed concern over the development that core inflation has plateaued for the last three months rather than trending down.

"If it turns out this is a short-term hang before it comes down again, great, if it turns out it's not, then I and everybody else has to rethink something," he added.

In April, Posen gave up his call for further quantitative easing, minutes of the monetary policy meeting revealed yesterday. Regarding the switch in his stance, he said it seems likely that quantitative easing thus far has the desired effect to loosen monetary conditions.

by RTT Staff Writer

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