LONDON (AP) — Bank of England Governor Mark Carney says the central bank can extend the time over which it returns inflation to target.
Addressing an audience to reflect on 20 years of the bank's independence, Carney said Thursday that bringing inflation back to target "too rapidly could cause undesirable volatility in output and employment."
Inflation in Britain is running at an annual rate of 2.9 percent, above the bank's target of 2 percent. There's mounting speculation the bank may raise its main interest rate from the record low of 0.25 percent in November.
Carney also said that the bank cannot prevent the weaker real income growth "likely to accompany" Britain's exit from the European Union, but it can "influence how this hit to incomes is distributed between job losses and price rises."