The Bank of England governor Andrew Bailey warned that inflation risks and market jitteriness over the Chancellor are casting doubt on a base rate cut. He expressed particular concern about weakness in the labour market and said there is considerably more doubt about the timing and pace of interest-rate cuts. The central bank projects the consumer prices index (CPI) to rise to 4%, double its 2% target. Bailey identified rising food prices and an employer tax increase as main drivers. He said financial markets remain cautious about the pace of cuts and that his message has been understood.
"There is now considerably more doubt about when and exactly how quickly we can make those further steps."
"That's the message I wanted to get across"
"Now, I think actually, judging by what's happened, certainly to market pricing since then, I think that message has been understood."
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