BoE's Bailey: 'Powerful downward forces' will tame inflation

Inflation is forecast to drop to under 5% in the coming year

clock • 2 min read

Bank of England (BoE) governor Andrew Bailey has told the Treasury Committee he expects inflation to fall quickly this year, following record-high inflation in 2022.

"There are powerful downward forces on inflation now," Bailey told MPs today (9 February). "We expect it to fall rapidly this year to somewhere below 5%." "I do think we have turned the corner," he added. "Headline inflation is now under where we had forecast it to be."  The downward forces he referred to are the demand destruction and tighter money supply resulting from the move to 4% interest rates from just 0.25% before the hiking cycle began.  However, Bailey was quick to caveat the dovish outlook with some notes of caution: "We are still concerned about inflation persistence, ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

Five key takeaways from the Spring Statement 2025

Five key takeaways from the Spring Statement 2025

OBR growth, ISA reforms and defence

Sorin Dojan
clock 27 March 2025 • 4 min read
Bank of England halts interest rate cuts amid ongoing inflation

Bank of England halts interest rate cuts amid ongoing inflation

As priced in by markets

Sorin Dojan
clock 20 March 2025 • 2 min read
More work needed to tackle inflation as BoE members warn of further market turmoil

More work needed to tackle inflation as BoE members warn of further market turmoil

BoE MPC members spoke at Treasury Committee hearing

Sorin Dojan
clock 06 March 2025 • 2 min read