Gradual rate cuts likely over next year- BoE’s Bailey

Bank of England (BoE) Governor Andrew Bailey indicated that gradual interest rate cuts are likely over the next year, emphasising that the disinflation process is ‘well embedded.’

Speaking at the Financial Times Global Boardroom event, Bailey noted that while inflation had briefly returned to the BoE’s 2 per cent target over the summer, it rose above target again in October, highlighting ongoing price pressures.

Sterling declined against the US dollar after reports that financial markets anticipate four rate cuts in 2024, a scenario factored into the BoE’s latest economic forecasts. Bailey underscored the importance of a measured approach, stating, “We emphasised in that report the word ‘gradual.'”

Addressing global trade risks, Bailey said estimating the inflationary impact of rising trade tariffs, particularly under a potential second Trump presidency, remains complex due to variables such as exchange rates and international reactions.

Attribution: Reuters

Subediting: M. S. Salama