LONDON, (Reuters) – Monday’s Bank of England Deputy Governor Ben Broadbent stated that British inflation could “comfortably exceed 5%” in April. He also suggested that the tight labor market in Britain was likely to continue to fuel inflation.

Last month, the BoE stated that inflation will reach 5% by next year’s second quarter before declining. This is in an effort to guide the economy out of a slump caused by a pandemic.

Broadbent indicated that the central bank’s target of 2% would need to be increased further.

Broadbent explained that the aggregate rate for inflation was likely to increase over the next few weeks and will probably comfortably exceed 5% by the time the Ofgem cap on retail prices of energy is next adjusted in April.

He also spoke to Leeds University Business School to say that the recent rise in goods inflation, partly driven by global supply chains squeezes, was likely to recede and reverse before any BoE rate increases would have an effect.

He stated that despite the fact that it is more probable than not, he believes that trade price pressures will lessen than increase.

Broadbent was among the nine members of the BoE’s Monetary Policy Committee that voted last month to hold interest rates at 3%. This shocked the financial markets, which had been expecting a rise.

Because of the Omicron coronavirus, investors are betting less than 50% on the BoE increasing rates to 0.1% to 0.25% Dec. 16 after their latest meeting.

Broadbent stressed in his speech that it could take up to two years for moves like changes to the interest rates made by central banks to affect the economy.

“We can think at each meeting about the interest rate that will maximise our chances of reaching the inflation target precisely in two years,” he stated.

We will keep doing that.”