Bank Of England's Bailey Sweats Over Risk Of 'Sticky' Summer For Inflation

  • Bank of England Governor Andrew Bailey said he was concerned about the risk of "sticky and stubborn" inflation over the summer after data showed food prices still rising sharply despite a drop back to single digits for the headline inflation rate in April.
  • Data published earlier on Wednesday showed the consumer price index rose by 8.7% in annual terms last month. That was down from 10.1% in March and a peak of 11.1% last October but was higher than expected by economists polled by Reuters.
  • Bailey, speaking at a Wall Street Journal (WSJ) event, said the fall in April's inflation rate was "welcome" but the BoE had to focus on food prices which were up 19.0% over the 12 months to April and core inflation which gathered steam.
  • Food companies had signed up for contracts that represented higher-than-usual costs after last year's energy price surge, meaning a fall in raw material prices could take a long time to work its way through to consumers.

(Source: Reuters)