MNI BRIEF: Signs Recruitment Pressures Easing - BOE Bailey

Bank of England Governor Andrew Bailey told the House of Lords Economic Affairs Committee that "our expectation is there will be more to do" on rate hikes but that he saw signs of labour market pressures easing.

Bailey said that while the Monetary Policy Committee's central projection was that high inflation would "unwind quite rapidly" the Bank's forecasts had a historically exceptionally large upside risk built into them, in part because of concerns over the tightness of the labour market. There are signs, however, that that risk is easing. He noted that firms had previously cited the difficulties of recruiting staff but from his recent business visits "they are ... seeing that pressure beginning to ease."

Bailey also said that the excess UK risk premium, which spiked following the failed September mini-Budget, has "pretty much gone away" with lenders now starting to lower rates on fixed rate mortgages.