Analysis | The Bank of England Risks Hiking Too Far Ahead of the Fed – The Washington PostOctober 12, 2021
The panic is irrational. The BOE has been in stimulus mode for too long without having its faith challenged. But, now, faced with seemingly alarming events, it has lost its religion that inflation is purely transitory. But hiking interest rates is not going to lower the price of natural gas, train more truck drivers or produce more computer chips. It is overseas cost-push inflation that overwhelmingly affects the supply side; so, why respond with a blunt demand-side hammer? George Buckley, chief U.K. economist for Nomura International, argued in the Times of London that fighting inflation might be the wrong call.