BoE Governor Bailey (opening remarks) says there is no evidence of 2nd-round effects, but we cannot draw too much comfort from this; stands ready to adjust policy stance as the outlook changes

Second-round-effects language has been the Bank's core framing through the post-shock tightening and easing debate: the argument has consistently run that wage-setting and price-setting behaviour, rather than the initial impulse, is what determines how long restrictive policy must be held. Denials of visible second-round effects paired with a refusal to take comfort are the standard pattern late in a disinflation, where officials acknowledge the mechanism has not materialised while keeping optionality against services inflation and wage growth that remain above target-consistent rates. Remarks of this kind from the Governor tend to matter most for the front end and the belly of the gilt curve and for sterling through the rate differential channel, but only insofar as they shift the perceived reaction function between the MPC's hawkish and dovish wings, since it is the committee median rather than any single speech that sets the path. The 'ready to adjust' formulation is symmetric boilerplate and on past occasions has carried little signal on its own; the tell is whether it is echoed in subsequent MPC commentary and how it sits against the next wage and services CPI prints ahead of the following decision. Opening remarks are the softest form of guidance, with the Q&A and any follow-up speeches the more reliable read on conviction.