Andrew Bailey: No need for inflation to come back to 2% target before cutting rates

Focus on three key indicators

Bank of England governor Andrew Bailey said the central bank does not need to wait for inflation to come back to its 2% target before cutting interest rates, as he brushed off deep recession fears.

During a Treasury Select Committee hearing today (20 February), he told MPs the Monetary Policy Committee is looking for "sustained progress" on three key indicators to reach a judgement about how long the period of restrictive monetary policy needs to be maintained.  Alongside the persistence of energy effects on headline inflation, the MPC is focusing on services prices, pay and the labour market quantities, which Bailey said committee members have seen "encouraging signs" of easing. UK enters technical recession as economy shrinks 0.3% in Q4 2023 "Services inflation is still abo...