While the Fed acknowledges that Jerome Powell may have been a little flippant about rising inflation, the FOMC have actually taken significant steps to rectify his error.

This in contrast to the Bank of England, which has agreed that it underestimated the rate at which inflation would accelerate, but has made no significant effort to rectify its error.

To many observers, the MPC appear to remain unsure about how it can tighten monetary policy without tipping the economy into recession.

Its series of dovish hikes have had no significant effect on the rise in inflation and while it is clear that the supply side of the economy cannot be dealt with by hikes in interest rates, the demand side certainly can. However, the drip drip of twenty-five basis points coupled with dire warnings from the Bank’s Chief Economist are unlikely to have the desired effect.

This is particularly true when Huw Pill holds his hands up to being the person who didn’t see inflation rising as fast or as far, and he and his department told the MPC so.

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