MNI BRIEF: BOE Bailey Says Inflation Fall To Continue

Bank of England Governor Andrew Bailey told lawmakers on the Treasury Select Committee that he is confident inflation would keep falling and that, hopefully, inflation expectations would continue to decline.

"Inflation is on a downward path" and the fall will continue, Bailey said, denying that the Monetary Policy Committee had any downside bias in predicting inflation.

His MPC colleague, Swati Dhingra, made clear in her written evidence that she remained opposed to further tighterning. "Policy is already sufficiently restrictive, and the lagged effects of further tightening pose serious risks of output volatility in order to make a small dent on inflation," she said.

Dhingra sketched out the case for the MPC switching to 'high-for-long' guidance on the policy rate, saying "The duration of our restrictive stance is important, and I have argued that our communications should seek to emphasise this aspect."