BoE’s Bailey: Inflation easing but price hikes expected later this year

Bank of England (BoE) Governor Andrew Bailey said on Monday that inflation is slowing, though a slight increase in price growth is expected later the current year. He attributed part of the rise to regulated price hikes, such as for energy and water, but suggested the weak economy would prevent long-term inflation pressures.

Bailey also stated that recent data showing 0.1 per cent growth in the economy during the fourth quarter of 2024 did not alter the broader outlook. Earlier this month, the BoE cut its benchmark interest rate to 4.5 per cent and lowered its 2025 growth forecast to 0.75 per cent. Inflation is expected to hit 3.7 per cent, almost double the BoE’s 2 per cent target.

Bailey added that global factors, including US trade tariffs, could affect UK inflation. He also expressed support for US plans to implement Basel 3.1 bank capital rules, while the BoE has delayed similar measures in the UK until 2027.

Attribution: Reuters

Subediting: Y.Yasser