Bank of England policymaker Alan Taylor played down concerns about a recent surge in inflation in a newspaper interview published on Friday and renewed his call for lower interest rates in Britain due to risks to growth from U.S. President Donald Trump's trade war.
Official figures last week showed British consumer price inflation jumped to a higher than expected annual rate of 3.5% in April, from 2.6% in March.
Taylor said in an interview with the Financial Times that April's "very strong" inflation stemmed from "one-time tax and administered price changes" rather than "demand and supply pressures, for the most part".
The BoE had trimmed its inflation forecast this month, seeing it peaking around 3.5% in the third quarter of 2025, down from around 3.75% in the previous forecast. It estimated then that the U.S. tariffs would lower British inflation by 0.2 percentage points in two years' time and shrink the size of the economy by 0.3% after three years.
Taylor and another Monetary Policy Committee member, Swati Dhingra, voted for a bigger half-point cut in the central bank's policy meeting in May, where rate-setters cut interest rates by quarter of a percentage point to 4.25%.
"I'm not going to pre-emptively announce my vote, but I think I indicated in my dissent that I thought we needed to be on a lower (monetary) policy path" Taylor told the Financial Times.
Taylor, the newest member of the MPC, said he was concerned by the trade situation. While he made similar comments earlier in May, Friday's remarks came before a U.S. federal appeals court temporarily reinstated Trump's tariffs after a trade court ruled the president had exceeded his authority in imposing them.
"I'm seeing more risk piling up on the downside scenario because of global developments," Taylor said, adding that the impact of Trump's tariffs on imports would "be building up over the rest of this year in terms of trade diversion and drag on growth".
Taylor struck a more downbeat tone than BoE Governor Andrew Bailey, who in a speech on Thursday said that the central bank's "gradual and careful" approach to further interest rate cuts was justified by ongoing uncertainty about the global trade picture and its impact on domestic inflation.
With Britain's public finances under pressure, finance minister Rachel Reeves is due to deliver her first multi-year spending review on June 11 to set budgets for public services.
