Bank of England Governor says premature to consider battle against inflation won
Date
8/25/2024 5:00:05 AM
(MENAFN) bank of England Governor Andrew Bailey emphasized on Friday that it is premature to consider the battle against inflation won. Speaking at the annual Jackson Hole symposium in Wyoming, Bailey expressed cautious optimism regarding inflation expectations, attributing improvements to the current monetary policies. He noted that the anticipated second-round effects of inflation appear to be less severe than previously forecasted, suggesting that the measures in place have had a stabilizing impact.
Consumer inflation in the UK saw a slight increase in July, rising by 2.2 percent year-on-year compared to 2 percent in June, aligning with the central bank's target. Despite this, Bailey underscored that significant challenges remain. The Bank of England had recently reduced the bank rate by 25 basis points to 5 percent, its first cut from a 16-year high, reflecting ongoing efforts to manage inflation while balancing economic stability.
Bailey acknowledged the substantial decline in headline inflation since the pandemic, particularly due to decreases in energy and food prices. However, he also pointed out that some inflationary pressures persist, and the situation remains fluid. He highlighted that inflation persistence is now lower than anticipated a year ago but cautioned that the central bank's job is not yet complete.
Looking ahead, Bailey stressed the necessity for continued restrictive policy settings until the risks to achieving a sustained 2 percent inflation target diminish further. He emphasized that monetary policy will need to proceed steadily to ensure long-term stability and address remaining inflation risks effectively.
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