Carney says inflation to rise on weaker pound post Brexit

Bank of England Governor Mark Carney has said inflation will rise on products due to the drop in the value of the pound following the Brexit vote.

Speaking at a public roundtable with charities and other sector organisations in Nottingham, Carney said food would be the first to experience price increases on sterling’s fall but that the weakening of the currency helps the currency adjust.

He did, however, admit that rise in inflation would hurt consumers of the lowest incomes.

Carney expects inflation on overall goods and services would gain over the next "few years".

The pound initially rose against the dollar following Carney’s comments but fell back 031% to $1.2216 at 1343 BST.

The Governor said the BoE was willing to “tolerate a bit of an overshoot” on the 2% inflation target to avoid unnecessary unemployment and support economic growth.

Carney said between 400,000 and 500,000 jobs could have been at risk if the Bank had not taken action after Britain voted to leave the EU on 23 June.

The BoE slashed interest rates and boosted monetary stimulus in August to cushion the blow of Brexit.

His remarks on inflation come after Unilever became involved in a dispute with supermarkets over plans to increase its prices on products due the decline in the value of sterling.