Central Bank of England (BOE) Governor Andrew Bailey and other policymakers have testified before the UK Parliamentary Treasury Committee on Wednesday, about their previous decision to raise interest rates in the fight against inflation.
However, after twice interest rates were raised, central banks seem to be beginning to give indications to start slowing tightening in their monetary policy.
Bailey said he sees the risk of inflation increasing, but warns investors not to speculate too aggressively on rate hikes in the future.
This is because, high interest rates are also actually not good because it can dampen activity in the economy and increase unemployment, according to Bailey.
This statement was later supported by a BOE policymaker who voted for a 50 basis point rate hike at a recent policy meeting that he saw a ‘moderate’ tightening in the next few months.
UK inflation rates remained at a 30 -year high in January despite the BOE having started raising its interest rates in December.
The pound remained gloomy following the statement as well as being affected by risky market sentiment due to the growing threat of war between Russia and Ukraine.
