Davies: Central banks could have done more to contain inflationary pressures

Sir Howard Davies, the chairman of NatWest and a former deputy governor of the Bank of England (BoE), believes central banks could have done more to contain inflationary pressures which emerged as Covid-19 lockdowns eased. He said that the BoE could have raised rates earlier and eased back on quantitative easing (QE). Sir Howard said: “For central banks to say, ‘we’re powerless’, is not really a good message.” He accepted that most of the inflationary pressure “is from forces that are outside the Bank of England’s control,” but said there was an element “which does relate to very rapid increases in the money supply, which were driven by very low interest rates and by massive QE.”

The Times