MNI BRIEF: BOE Bailey - Worry Is Sticky Downwards Inflation

The Bank of England Monetary Policy Committee's concern was not a wage-price spiral driving inflation up but that inflation would prove to be sticky as it came back down only gradually, Governor Andrew Bailey said Wednesday.

Bailey's comments, at a Wall St Journal event, followed data showing CPI fell less rapidly than forecast in April, dipping to 8.7% on the year. He said that the key concern was "the stickiness downwards ... how fast is it going to come down?"

"We have seen a much stronger labour market, with firms determined to hang on to labour because it had been so hard to hire people, and that unemployment has been lower than the Bank expected, Bailey said. Against this backdrop he said that the MPC's approach from February onwards was to take it one meeting at a time based on the data and "we wanted to give the signal that while were not saying it (hiking) was over ... we don't necessarily see this as a...constant upward movement."