The Bank of England may have to put up interest rates if the commodity price boom continues, deputy governor Charles Bean warned today in an article in the Guardian.
Suggesting further splits in the Bank's already divided monetary policy committee, Bean pointed to the substantial rises in food and oil prices in recent months as a reason for possible rate increases. North Sea Brent Crude hit $102.02 a barrel yesterday, amid concerns that the riots in Egypt could trigger the overthrow of regimes in the Middle East and north Africa. Metal prices are also at record highs. While the central bank expects inflation, currently at 3.7%, to fall back to its 2% target provided there are no further shocks, Bean said the economic boom in some emerging markets could drive commodity prices higher.
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