Bloomberg Talks BOE Governor Andrew Bailey Talks June Rates
May 8, 2025
Andrew Bailey, the Governor of the Bank of England, shares his thoughts after a surprising quarter-point interest rate cut. He discusses the intricate relationship between economic indicators, wage trends, and inflation. The conversation dives into the complexities of international trade dynamics and how these can influence future monetary policy. Bailey also addresses the uncertainties surrounding economic forecasts and the challenges of predicting inflation amidst a shifting landscape.
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Balanced Approach to Inflation Risks
- The Bank of England weighs risks on both sides: weaker demand could lower inflation, while limited supply growth could keep inflation high.
- Signs suggest wage growth may be easing, offering a potential downward pressure on inflation this year.
Open-Minded on Future Rate Moves
- The Bank remains open-minded about future rate moves as many domestic and international factors will evolve in coming weeks.
- Upcoming pay settlement data and global developments will significantly influence policy direction.
Trade Deals' Broad Impact
- A UK-US trade deal is positive but the UK's open economy means broader global trade relationships also matter critically.
- Additional deals beyond US-UK are needed for meaningful long-term economic benefits.