BOE governor Bailey: There was a bit of a debate about the world “careful”

• We continue to use “gradual” because we continue to have to see the disinflation process take place
• We added the word “careful” deliberately
• Around that, there is greater uncertainty that we face in the current environment
• That uncertainty is both domestic and global
• The uncertainty explains why we paired “gradual” with “careful”

Again, the way I would read this is that it adds some reassurance in terms of policy guidance. Even though markets are not expecting back-to-back rate cuts by the BOE, this pretty much reaffirms that sentiment. It also offers them some added flexibility if they do have to deal with more stubborn price pressures in holding rates for a bit longer.

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