Jonathan Haskel, a policy member of the Bank of England, hinted that he was still opposed to scaling back stimulus measures now, saying the UK economy was hampered by a tighter fiscal policy stance and a surge in the number of people infected with the Delta strain.
His speech hinted at possible disagreements next month when the eight-member central bank's monetary policy committee (MPC) debated how to deal with an unexpected rise in inflation above the 2 per cent target. Last week two MPC members said the Bank of England should consider scaling back its bond-buying programme.
Haskel, who has been in the dove camp for months, admits that productivity gains from investment and working from home may ease the scars left by the epidemic. However, he also said that the UK still faces the risk of the rapid spread of the Delta strain and that economic growth has been largely boosted by government support measures, which are being withdrawn.
"in the short term, the risk of premature monetary tightening to contain the recovery still outweighs the risk of temporarily exceeding the inflation limit," Haskel said. "I don't think tighter policy is the right policy for the foreseeable future."