--- title: "BOE Can Tolerate Inflation That Is Temporarily Above Target, Gov. Bailey Says" type: "News" locale: "en" url: "https://longbridge.com/en/news/288047065.md" description: "Bank of England Governor Andrew Bailey stated that the central bank can tolerate temporary inflation above its target due to the weak economy. He emphasized that the recent rise in energy costs from the Middle East conflict has increased inflation but may also slow economic growth. Bailey indicated that while the BOE is unlikely to raise interest rates in the upcoming meeting, any signs of persistent inflation could change this stance." datetime: "2026-05-29T09:55:38.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/288047065.md) - [en](https://longbridge.com/en/news/288047065.md) - [zh-HK](https://longbridge.com/zh-HK/news/288047065.md) --- # BOE Can Tolerate Inflation That Is Temporarily Above Target, Gov. Bailey Says By Paul Hannon The Bank of England can tolerate inflation that is above its target for a brief period of time, given the weak state of the economy, Gov. Andrew Bailey said Friday. In a speech delivered in Iceland, Bailey also said that by ruling out rate cuts that were expected before the U.S. and Israel launched their attacks on Iran in late February, the central bank had already tightened its policy, with interest rates on new mortgage loans having risen. The jump in energy costs since the start of the conflict in the Middle East has pushed the U.K.'s inflation rate higher but is also expected to slow the economy, presenting the BOE with a difficult balancing act. "Tolerating temporarily above target inflation to provide some support for the real economy is an appropriate way to approach the trade-off," Bailey said. "But that tolerance would weaken if signs of second-round effects begin to emerge." The governor's comments suggest he is unlikely to back a rise in the key interest rate when the central bank's Monetary Policy Committee meets next month. Write to Paul Hannon at paul.hannon@wsj.com (END) Dow Jones Newswires May 29, 2026 05:42 ET (09:42 GMT) Copyright (c) 2026 Dow Jones & Company, Inc. ### Related Stocks - [LUK2.UK](https://longbridge.com/en/quote/LUK2.UK.md) - [XDUK.UK](https://longbridge.com/en/quote/XDUK.UK.md) - [XUKS.UK](https://longbridge.com/en/quote/XUKS.UK.md) - [ISF.UK](https://longbridge.com/en/quote/ISF.UK.md) - [VUKE.UK](https://longbridge.com/en/quote/VUKE.UK.md) - [SUK2.UK](https://longbridge.com/en/quote/SUK2.UK.md) ## Related News & Research - [BOE seen on hold through 2027 despite inflation spike](https://longbridge.com/en/news/294124715.md) - [Fed's Kashkari says 'now is the time to start slowly moving' rates up](https://longbridge.com/en/news/294967753.md) - [Poland - Factors to Watch August 3](https://longbridge.com/en/news/294649419.md) - [Cornyn reaches deal with Justice Department to allow Blanche nomination to advance](https://longbridge.com/en/news/294676452.md) - [REG - Intnl Personal Fin - Director/PDMR Shareholding](https://longbridge.com/en/news/294678603.md)