The Bank of England (BOE) is closely monitoring Britain’s booming housing market following the impact of a strong recovery from Covid-19 that will lead to a broader rise in inflation.
In an interview with The Guardian on Tuesday, BOE Deputy Governor Dave Ramsden told that the central bank expects a temporary rise in price pressures, and other BOE committees are also aware of the risks.
Ramsden, who is also responsible for markets and banking, said there was a risk of increased demand exceeding supply, and this would lead to an increase against higher inflationary pressures.
Therefore, the BOE will be vigilant and monitor the risks to rising inflationary pressures in general.
Inflation, as measured by the consumer price index in the UK, is at 1.5% and is expected to rise above the 2% target for the short term in the next few months.
UK house price growth on an annual basis rose 10.9% in May, the biggest increase in seven years, as a stamp duty deferral by the government spurred demand.
