Bailey ‘very uneasy’ about inflation Bank of England governor Andrew Bailey has admitted he is “very uneasy” about spiking inflation levels, telling the Treasury Select Committee: “It is not the course where we want it to be to have inflation above target.” He also said that the Monetary Policy Committee’s (MPC) recent decision to keep interest rates frozen at a record low of 0.1% was a “very close call”. Saying it makes sense to assess the impact on the economy of the furlough scheme coming to an end before opting to increase interest rates, he noted: “You can make the argument for doing it now, it is a very closely balanced argument.” Mr Bailey also suggested a rate increase is on the horizon, saying the MPC believes “it will be necessary over coming months to increase Bank Rate in order to return Consumer Prices Index (CPI) inflation sustainably to the 2% target.” While data shows that CPI inflation was 3.1% in the 12 months to September, the Office for Budget Responsibility expects the inflation rate to hit 5% in 2022 - far above the Bank's target of 2%.