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Q on reaction function

BOE
  • Bailey asked on reaction function. Watching the evolution or comparing to their forecast?
  • He says both. We have to look at the news and compare to where we thought things were going. June data shows one thing correct itself - actual headline inflation as that's in line with the May forecast. And one thing not correct itself - pay and the labour market (and some of that in services prices). Some of that turn around is why today there wasn't the case (for Bailey personally) for 50bp.
  • Ramsden says MPC's reaction function still depends on services inflation, labour market prices, private sector regular wages. And there was more confidence about that.

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