BoE head says risk of persistent inflation receding

Jerome Powell, chairman of the US Federal Reserve, right, and Andrew Bailey, governor of the Bank of England (BOE), during the Kansas City Federal Reserve's Jackson Hole Economic Policy Symposium in Moran, Wyoming, US, on Friday, Aug. 23, 2024. Powell said the time has come for the Federal Reserve to cut its key policy rate, affirming expectations that officials will begin lowering borrowing costs next month and making clear his intention to prevent further cooling in the labor market. Photographer: Natalie Behring/Bloomberg

London: Bank of England (BoE) governor Andrew Bailey says it is “too early to declare victory” over inflation but the risks of persistent inflation appear to be receding, a sign he’s growing more confident about further interest rate cuts.

Bailey said the “second round inflation effects appear to be smaller than we expected” and that “we are now seeing a revision down in our assessment of that intrinsic persistence, but this is not something we can take for granted”, according to a text of a speech he delivered last Friday in Jackson Hole, Wyoming.