BoE's Bailey says he will be going into the coming meetings asking if a cut is justified. Expects inflation to get back in proximity to the target in April. Rate cut at the next meeting is a genuinely open question.

• Expects to see some scope for further policy easing, probably in 2026.
• Would have been premature to take a decision at the last meeting.
• Seeing some labour market softening.
• Rate cut at the next meeting is a genuinely open question.
• The key question is if inflation will feed into expectations, do not necessarily need to see this for a further cut.

Bailey's comments from the BoE signal a potential shift in monetary policy, as he is openly questioning the justification for a rate cut in the upcoming meetings. His expectation for inflation to align closer to target by April suggests a more cautious approach, yet the acknowledgment of labor market softening indicates that the committee may still have room to ease policy if necessary. This developing narrative may create volatility in GBP and fixed income markets as traders reassess rate expectations, particularly with any signal of easing coming as early as the next meeting.