Bank of England Governor Andrew Bailey has asked businesses to stop hiking commodity prices to calm the country’s economic crisis. He said that further price hikes would risk higher bank rates.
Governor Andrew Bailey talks about England’s inflation crisis
The Bank of England has been hiking its rates due to the high inflation affecting the country’s fiat. Bailey made these comments in his speech when announcing that the bank was raising the rates by 0.25 basis points to 4.25, a 14-year record high.
Bailey explained that the country’s inflation is not in a good place, and the bank may need to do more if the inflation doesn’t start cooling too by this summer. His warning comes when the country’s inflation is shown to have risen to 10.4% in February from 10.1% in January. Additionally, the bank aims to bring it down to only 2%.
In his speech, Bailey said:
“I would say to people who are setting prices: please understand if we get inflation embedded, interest rates will have to go up further.”
He added, “When companies set prices, I understand they must reflect the costs they face. But I would say, please, that when we are setting prices in the economy and people are looking forward, we expect inflation to come down sharply this year, and I would just say, please bear that in mind.”
Financial crisis spreads globally
Elsewhere, most countries are bracing hard against bank collapses and ruthless inflation rates. Countries like Argentina, Turkey, Sudan, Venezuela, and Lebanon have rates over 50%.
Additionally, only Japan has an inflation rate of below 5% among G7 countries, which shows how serious the matter is. As a result, high standards of living and a more nervous stock market are being experienced, with global leaders trying to calm the situation by claiming that the finance system is still intact.
However, this is not a sentiment everyone shares, which is evident with the continuous sell-off seen globally.
Keep watching Fintech Express for macro-finance and other fintech-related news updates.