Bailey: Latest inflation data in UK “good news”

Bank of England (BoE) Governor Andrew Bailey described the most recent inflation statistics as “good news” and pointed out that it indicated greater downward pressure than they had anticipated during his testimony before the UK Economic Affairs Committee on Wednesday.

Bailey’s remarks did not cause the GBP/USD to move noticeably. The pair was down 0.3% for the day at 1.2550 as of the time of publication.

Key Quotes

“Short term equilibrium interest rate has probably gone up.”

“I don’t think rates are going back to zero, they will be lower than today, probably somewhere in the middle.”

“As headline inflation comes down, that will lower inflation expectations and feed into wage bargaining, we are starting to see this process.”

“We don’t see any evidence of a problem in gilt market due to BoE sales.”

“Downward pressure on inflation is quite broad-based.”

“Overall inflation data leaves us broadly where we expected to be.”

“This week’s data does not really change our view from February policy decision.”

“We have moved from how restrictive policy needs to be to for how long we need to maintain policy stance.”

“Services inflation is not compatible with 2% inflation.”

“We are seeing signs of pay growth coming down.”

“Latest wage data showed quite a marked reduction but not as far as we thought.”

“We need to see more evidence of slowing wage growth to be confident of inflation at 2%.”