A general view of the Bank of England (BoE) building, which confirmed the BoE would hike interest rates to 1.75% in London, UK on August 4, 2022. REUTERS/Maja Smiejkowska/File Photo
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LONDON, September 26 (Reuters) – Bank of England Governor Andrew Bailey said on Monday that the BoE “will not hesitate” to hike interest rates if necessary to meet its 2% inflation target , and that she observes the financial markets “very closely”. after sharp moves in asset prices.
Sterling fell to a record low against the US dollar in Asian trading on Monday, extending losses that accelerated on Friday after Finance Minister Kwasi Kwarteng filed his first tax return and promised big tax cuts.
“The Bank is closely monitoring developments in financial markets given the significant repricing of financial assets,” Bailey said in a statement.
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“The MPC will not hesitate to change interest rates as needed to bring inflation back to the 2% target on a sustainable basis in the medium term, in line with its mandate,” he added.
Shortly ahead of the BoE statement, Finance Minister Kwasi Kwarteng said he would release a medium-term fiscal plan on Nov. 23 and the Office for Budget Responsibility would release updated growth and borrowing forecasts.
“I applaud the government’s commitment to sustained economic growth and the role of the Office for Budget Responsibility in its assessment of the outlook for the economy and public finances,” Bailey said.
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Reporting by David Milliken and Muvija M; Adaptation by William James and Alistair Smout
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