Following BoE’s decision to raise interest rates by 25bps to 4.25%, Governor Andrew Bailey expressed uncertainty about whether this would be the peak for rates.
Talking to broadcasters, Bailey said, “We don’t know whether it’s going to be the peak,” adding that “We’ve seen signs of inflation really peaking now. But of course it’s far too high… We need to see it starting to come down progressively and get back to target.”
In a separate video, Bailey explained the rationale behind the rate hike, stating, “Inflation is still too high, but we continue to expect it to fall sharply from the middle of this year. Raising interest rates is the best way we have of making sure that happens.”
He also emphasized that “low and stable inflation is the foundation of a healthy economy,” and that raising rates is the “best tool” for bringing inflation back under control.
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