BOE governor Bailey: I will not specify what gradual means for rate cuts

• The market curve is what it is
• We’ve used the term “gradual” for some time already now
• But will not go beyond what the term may mean as there is still a lot of uncertainty
• It is good news that inflation is well below where they thought it would be a year ago
• But we are still in a world where there are very big geopolitical shocks going on
• Need to watch out for external shocks, not just domestic risks
• If disinflation progress continues, we will respond to it
• We cannot put monetary policy on hold until ONS improves labour force data. It makes our job harder.
• Downside inflation surprises could spur faster rate cuts.

Again, he’s just steering clear of pre-committing to anything and he is at least being explicit about it. He says he won’t fall into the trap of saying “gradual” means cutting every other meeting, as they will have to monitor developments first and then decide their course for action.

This article was written by Justin Low at www.forexlive.com.