Bailey speech: Parts of UK economy are still going forward strongly

Bank of England (BoE) Governor Andrew Bailey is delivering his remarks on the policy outlook and responding to questions from the press following the bank’s decision to hike the policy rate by 50 basis points to 1.75%.

Quotes

“We would have had to raise interest rates in double digits last year to fully offset current inflation, causing far deeper recession than now forecast.”

“Parts of UK economy are still going forward strongly, including in job market.”

“Pass-through of BOE rate rises has been faster to borrowers than to savers so far.”

“Important that savers receive the return they should.”

“Risks around MPC forecasts are exceptionally large.”

“Near-term inflationary pressures have intensified significantly.”

“Rise in energy prices has exacerbated fall in real incomes, led to another big deterioration in outlook.”

“UK is forecast to enter recession later this year.”

“Economic cost of war in Ukraine will not deflect BOE from setting rates to hit 2% target.”

“Underlying nominal wage growth is expected to pick up further.”

“Labour market may only loosen slowly in response to falling demand.”

“Mix of high near-term inflation and weak activity is a challenging backdrop for monetary policy.”

“No ifs or buts in our commitment to 2% inflation target.”

“More forceful action was justified in August because there are some indications price pressure becoming more persistent and broader.”

“Faster policy tightening now reduces the risk of a more extended and costly tightening cycle later.”

“50 bp rate rise today does not mean we are now moving to a pre-determined path of raising rates by 50 bp per meeting.”

“All options are on the table for the September meeting and beyond.”

“BOE will not comment on Conservative leadership candidates’ plans.”

“BOE has a very clear mandate of price stability.”

“Consequences of Russia’s actions in Ukraine have a serious economic impact.”

“Political pressures have been very well managed since BOE independence.”

“I have not abandoned the narrow path analogy for UK policy outlook.”

“A number of central banks have a similar narrow path to tread.”