BoE Governor Bailey (post-meeting statement) says based on current evidence, Bank Rate expected to be reduced further

STANCE:

• Not facing a situation where monpol is being hit by news shocks
• Says there should be scope for some easing of policy, but risks remain
• Monpol is being set to balance inflation and labour risks
• Based on current evidence, Bank Rate expected to be reduced further; will depend on inflation outlook, and if inflation and the labour market evolve as expected
• Cutting too quickly or too much could lead to inflation pressures persisting; waiting too long could come at the cost of a sharper downturn in activity and inflation

INFLATION:

• Disinflation is ahead of schedule, expects inflation to decline further, reaching close to 2% by April
• Reaching target around a year earlier than expected
• BoE must ensure inflation is all the way back to target and stays there sustainably
• Risk from greater inflation persistence has continued to become less pronounced
• Upside risks to inflation have continued to diminish
• Services inflation and wage growth needs to slow further
• Risks to inflation from weaker demand remain

LABOUR MARKET:

• Labour market conditions have loosened further
• Employment has been flat over the last year
• Redundancy rates have picked up

ECONOMY:

• UK activity has remained subdued
• GDP growth expected to strengthen to 2% per year by 2028, underpinned by consumption and housing market
• Weaker economic demand could weaken the economy, inflation could settle below 2% unless policy is loosened further
• Risks include less labour market slack than expected; productivity growth could disappoint relative to expectations