MNI BRIEF: Activity Stronger, Wage Growth Weaker - BOE Bailey

Economic activity recently has been stronger and nominal wage growth weaker than the Bank of England had expected, Bank of England Governor Andrew Bailey said Monday. although he offered no fresh steer on whether a further rate hike was likely to be needed.

Bailey, speaking at the LSE, said that if there were signs of more persistent inflationary pressures further policy tightening would be required but the recent data have been mixed.

"The evidence has pointed to more resilient activity in the economy, and likewise employment; signs that nominal wage growth has been rather weaker than expected," he said, with inflation surprising at first on the downside and then in February on the upside of BOE expectations, with the Monetary Policy Committee hiking 25 basis points at its March meeting.

Bailey reaffirmed the Bank's belief that there would be a sharp fall in inflation this year, likely starting in a couple of months, and he noted that the effects of previous rate hikes had yet to feed through in full.