Bailey Sticks to Well Worn Messaging at Mansion House

Bailey's Mansion House speech released: "New prospects for money". Full speech here: https://www.bankofengland.co.uk/-/media/boe/files/...

Highlights:

• Above-target headline inflation with labour market tightness and demand pressure in the economy has made underlying developments in goods andservices price inflation more sticky than previously expected.
• Both price and wage increases at current rates are not consistent with the inflation target.
• Some of that tightening is still to come through the policy pipeline, and we expect underlying inflationary pressures to recede as headline inflation falls.
• But the Monetary Policy Committee is monitoring developments – in particular, those in the labour market, in wage growth and in services price inflation – to assess whether pressures are proving more persistent.

Much of Bailey's speech on bank regulation and digital currencies - relatively few mentions of interest rates and/or monetary policy outside of the above highlights. GBP/USD is on the way higher, however looks reflective of the USD softening rather than anything GBP based. Not much in it to surprise on the monetary policy front - implied peak BoE pricing has dipped about 1bp since the release, basically unch on the session (143bp of hikes seen to Mar 2024).