LONDON, April 25 (Reuters) - Bank of England Deputy
Governor Ben Broadbent said the central bank's use of interest
rates to tackle a surge in inflation - which remains above 10% -
had not been optimal, but had it acted earlier any impact on
price growth would have been modest.
"There is absolutely no doubt that had we seen these things
coming, policy would have been tighter earlier," Broadbent said
after making a speech at the National Institute of Economic and
Social Research, a think tank, on Tuesday.
"I mean, nor is this the optimal outcome. You're trading off
slack against inflation. You would have made a different
trade-off, had you seen all this coming."
A sharper rise in borrowing costs would have caused a jump
in unemployment although it would have aimed to stop inflation
hitting 10%, Broadbent said. "So we're not at the optimum now
either."
Later, Broadbent said the BoE would have succeeded in
lowering Britain's inflation rates by at most half a percentage
point if it had started to raise interest rates between three to
six months earlier than its first move in December 2021.
Broadbent said the BoE had been heavily influenced by data
which showed around a million people were receiving pandemic
furlough payments up until the programme's end in September
2021, which prompted concerns of a big jump in unemployment that
did not subsequently materialise.
(Writing by William Schomberg)
Reuters Messaging: william.schomberg.reuters.com@reuters.net))
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