- Latest inflation fall is good news, largely expected
- There are some signs that wage growth is coming off
- But there is weakening in some parts of the labour market
- Inefficient labour market is one upside risk to inflation
- Approach to monetary policy can be characterised as being watchful, responsive
- Would not rule out having to raise the bank rate further in the future
As they are in pause mode now, the rhetoric will be to acknowledge and paint a better outlook in inflation. But at the same time, keep the door open on any further tightening in policy if need be. Bailey adds that it would be “sensible to keep rates where they are” and that sums up the situation right now I would say.
This article was written by Justin Low at www.forexlive.com. Source