Higher UK inflation likely to hurt consumer spending - BoE's Haldane

Shoppers cross the road in Oxford Street, in London, Britain August 14, 2016. REUTERS/Peter Nicholls/File Photo

LONDON (Reuters) - Higher inflation is likely to hurt British consumer spending this year although such an outcome is not inevitable, Bank of England Chief Economist Andy Haldane said on Thursday.

Haldane said the effects the sterling’s slump since voters decided in June to leave the European Union was starting to trickle through in to higher shop prices.

“That will in turn produce something of a squeeze on the spending power of consumers and may lead them to throttle back somewhat in their spending plans,” Haldane said at an event in London hosted by the Institute for Government, a think tank.

“It might not happen, they might choose to run down their savings. But it’s possible, indeed I’d say likely that there will be something of a slowdown.”

(This story corrects name of organisation hosting event.)

Reporting by David Milliken and Ritvik Carvalho, writing by Andy Bruce, editing by William Schomberg