Ramsden Sees Risks to UK Inflation Tilted to Downside

Ramsden text published here: https://www.bankofengland.co.uk/-/media/boe/files/...

Highlights:

• Over past few months I have become more confident in the evidence that risks to persistence in domestic inflation pressures are receding
• Balance of risks to the outlook for UK inflation, relative to Feb MPR, is now tilted to the downside
• Likely bumps in the disinflationary process, but the UK is now less of an outlier on inflation
• I will continue to take a watchful and responsive approach to my policy decisions
• A scenario where inflation stays close to the 2% target over the whole forecast period at least as likely as the February 2024 forecast
• The restrictive stance of policy and the more symmetric unwinding of second round effects are also reducing the more persistent components of inflation such as services inflation.

All-in-all errs slightly dovish - particularly in the flagging of risks to UK inflation now being tilted to the downside. GBP has softened slightly, helping EUR/GBP trade back toward the day's highs, but the rally is shallow - the cross is yet to top the European am high at 0.8570.