BOE governor Bailey: We expect to be able to cut the bank rate further

• We will have to judge meeting by meeting how far and how fast
• The road ahead will have bumps
• There’s still a continued, gradual easing of underlying inflation pressures
• Coming rise in inflation is almost entirely due to factors not directly linked to pressures in the economy
• We expect these factors to be temporary
• We now expect GDP to be notably weaker in the near-term, before picking up in the middle of the year
• Consumers are more price-conscious and holding back on spending
• The disinflationary process has been slow too
• It is unclear what form of global trade policies will take
• The judgement we have to make in future meetings is whether underlying inflation pressures are easing enough to allow for further rate cuts
• We must also proceed carefully, judging the evidence afresh at each meeting
• The bank rate is not on a pre-set path

This is mostly a repeat and clarification of the statement and he’s putting a slight emphasis there on the word “carefully”. I’m sure it will be asked in the Q&A as such. GBP/USD is still lower by 1.0% at 1.2378, not too much changed during Bailey’s comments.

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