LONDON (Reuters) – Deputy Bank of England Governor Clare Lombardelli said on Monday she was more worried about the risk that inflation comes in higher – not lower – than the central bank has forecast as she made the case for only gradual reductions in interest rates.
“I view the probabilities of downside and upside risks to inflation as broadly balanced,” Lombardelli, making her first speech since joining the BoE in July, said to a conference organised by King’s Business School.
“But at this point I am more worried about the possible consequences if the upside materialised, as this could require a more costly monetary policy response.”
(Reporting William Schomberg and Andy Bruce)
