LONDON (Reuters) - Bank of England Governor Mark Carney said the “big picture” for inflation remained the same, despite a weaker-than-expected reading for June earlier on Tuesday, and the main driver was still the fall in sterling since last year’s Brexit vote.
“That’s what’s pushing inflation up, and inflation will be above target for a period of time and today’s figures are consistent with that,” he told Sky News.
The BoE has so far chosen not to respond to inflation rising above its 2 percent target by raising rates, saying the Brexit hit to the pound is likely to be temporary. Inflation in June stood at 2.6 percent, down from 2.9 percent in May.
However, three of the BoE’s eight rate setters voted to raise rates in June, saying they wanted to head off the risk of more persistent inflation. One of the dissenters has since left the BoE.
Reporting by Andy Bruce; Writing by William Schomberg