Bank of England governor Mark Carney says sterling’s fall helps the economy adjust, but that consumers will face difficulty going from “no inflation to some inflation”.
Speaking at a roundtable in Nottingham, Carney said the price of goods and services is going to rise in the next few years, with food being the first product to see higher inflation.
His comments come ahead of inflation figures due out on Tuesday.
Regarding sterling’s fall since the start of the month, the central bank governor said “we are not indifferent to it, it matters to the conduct of monetary policy”.
But he warns the Bank must “weigh increased inflation against supporting the economy” with low interest rates.
On Friday afternoon, the pound was trading at $1.22310.
The Bank has said it will look into the pound’s flash crash last week, when it dropped more than 6 per cent to $1.1841 in two minutes.