BoE governor sees low inflation as "temporary"

Mark Carney, governor of the Bank of England (BoE), Tuesday said the current low inflation in Britain was temporary and would return to the central bank's target of two percent within two years.

Carney told British lawmakers at the parliament that: "What's important is that workers and businesses understand this is a temporary phenomena."

He said: "Our job as the Monetary Policy Committee (MPC) is to bring inflation back to the two percent inflation target; we will do so in a reasonable horizon. That horizon, given the nature of the shocks hitting the economy at present, should be within the next two years."

Data showed the British inflation rate in January was 0.3 percent, slipping from the previous month's 0.5 percent and registering a record low.

The governor said the current inflation weakness was due to falling oil and food prices, and stressed that it was a one-off development.

Carney also noted that if there was any evidence of a further drop in the inflation rate, the central bank might cut the benchmark interest rate (currently at 0.5 percent), but he emphasized that the bank's focus was towards tightening.

The nine-member MPC of BoE voted unanimously on the holding benchmark interest rate at its February's meeting, as the risk of deflation was mounting in the country, according to the central bank's meeting minutes published last Wednesday. Endit