BoE Governor Andrew Bailey, in his remarks at an event overnight, has strongly indicated that the central bank is not yet in a position to consider reducing interest rates, stating it was “far too early to be thinking about rate cuts”.
He warned about the persistently high services inflation and noted that wage growth remains “elevated.” He added, when inflation is high, we take no chances.”
In his remarks, Bailey pointed out that the Monetary Policy Committee’s latest projections suggest that restrictive monetary policy stance will likely be necessary for “quite some time yet”.
Bailey also stressed the need for vigilance regarding inflation trends, indicating that BoE remains open to further interest rate increases if necessary. “We must watch for further signs of inflation persistence that may require interest rates to rise again,” he cautioned.
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