At a UK Treasury Committee hearing, Andrew Bailey said a March rate cut remains a “genuinely open question”. Bailey noted inflation is now expected to return to around the 2% target “sooner than we were expecting”, with April’s data—due in May—potentially showing inflation near target.
He added that the latest inflation reading came in broadly as expected, but the composition showed notable shifts. Goods prices have softened more than anticipated, likely reflecting trade effects from China, while food prices also eased more than forecast. Services inflation, however, has proven stickier.
MPC member Megan Greene, who has consistently voted to hold rates, cautioned that she remains concerned about the transition embedded in the central forecast. She described it as a “nifty handoff” where inflation hits target just as wage growth and expectations moderate, offsetting fiscal effects—a sequence she worries may not unfold smoothly.
Greene said she would need further evidence that wage growth is continuing to ease and that business and household inflation expectations are moderating before supporting a cut.
