BoE Governor Bailey says have to monitor the situation in the Middle East and how it affects the UK economy and inflation very closely and adjust policy as required
- Having taken expected cuts off the table for now, we have already tightened policy considerably in response to the shock relative to what had been expected by markets.
- Uncertainty about the strength of second-round effects means that monetary policy needs to balance the costs of leaning too little against these effects against the costs of responding too much.-
- Tolerating temporarily above-target inflation to provide some support for the real economy is an appropriate way to approach the trade-off. But that tolerance would weaken if signs of second-round effects begin to emerge.
- Higher inflation expectations are not coming through in wage expectations and settlements.
- Hope a fall in UK bond market curve will go on but depends on events in the Middle East.
- Markets "obviously" see pressure on fiscal plans of government from Iran war impact.
#UNITED KINGDOM#GBP#EUROPE#GOVERNOR#BOE#IMPORTANT#FIXED INCOME#EU SESSION#CENTRAL BANK#INFLATION#MONETARY POLICY