Interest rate cuts are in play, Bank of England governor Andrew Bailey says
Mr Bailey said he is increasingly confident that inflation is heading towards the Bank’s target in an interview with the Financial Times.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Interest rate cuts this year are “in play” amid signs that the risk of wage-price spiral has diminished, the Bank of England governor has suggested.
Andrew Bailey said he is increasingly confident that inflation is heading towards the Bank’s target in an interview with the Financial Times.
He signalled that markets were right to expect more than one interest rate cut this year and stressed how small the technical recession last year had been.
Mr Bailey told the paper: “It’s like the Sherlock Holmes dog that doesn’t bark.
“If the second-round effects don’t come through that’s good because monetary policy has done its job.
“We have an increasingly positive story to tell on that. The global shocks are unwinding and we are not seeing a lot of sticky persistence (in inflation) coming through at the moment.”
He said that rate cuts are “in play” at future meetings of the Bank’s Monetary Police Committee.
Amid mounting hopes of cuts on the horizon, the FTSE 100 edged closer to an all-time high on Friday.
The index of the UK’s top 100 stocks hit highs of 7,960 during the day, but did not manage to surpass the 8,000 mark.
Kathleen Brooks, research director at trading platform XTB, said: “The market rally this week was driven by news that central banks have shifted to a more dovish stance.
“At the Bank of England, Catherine Mann and Jonathan Haskel, the two remaining hawks at the Bank who had been voting for more rate hikes, changed their tune and opted for rates to remain on hold this month.
“The dovish shift in the Bank vote split is seen as a major step towards cutting rates later this year. The market now thinks that the first rate cut will come in June, and that there will be three rate cuts this year.”