"Andrew Bailey, the Bank of England Governor, remains relaxed about the prospect of inflation remaining above the Government’s 2% target for the foreseeable future.

Central banks in the developed world have all adopted a less proactive attitude to monetary policy, given the unpredictability of the recovery and how the withdrawal of various forms of support will affect growth and activity.

In the UK, the gradual withdrawal of various Government initiatives will bring unknown consequences, in particular to the property and employment markets.

For this reason, Bailey has to allow inflation to rise beyond its target level in order to be in a position to be flexible, leaving support in place if the economy dips, or beginning to taper if Monday's complete reopening drives inflation to levels which are considered to be unmanageable."

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