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MNI BRIEF: UK Inflation Stickier Than Anticipated - BOE Bailey

(MNI) London
(MNI) London

UK inflation has been more sticky than previously anticipated and the Bank of England remained committed to getting it back to the 2 percent target, with wage growth at current rates not compatible with that aim, Governor Andrew Bailey will say in his annual Mansion House speech Monday.

In his speech, Bailey will offer no direct comment on market rate expectations for the policy rate to rise markedly higher, from the current five percent to north of six percent, stressing instead that the Monetary Policy Committee would look again at inflation drivers in its August forecast round.

According to Bailey, the Monetary Policy Committee is focusing on developments in the labour market, in particular wage growth and in services price inflation. "It is crucial that we see the job through, meet our mandate to return inflation to its 2% target," he will say.

The bulk of his speech is not on monetary policy, but on the central bank's role in money, setting out the possibilities for a central bank digital currency in both wholesale and retail markets.

MNI London Bureau | +44 203-586-2223 | david.robinson@marketnews.com
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MNI London Bureau | +44 203-586-2223 | david.robinson@marketnews.com
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