BoE's Bailey predicts 'powerful downward forces' will rein inflation in

Forecast to drop to under 5% in 2023

Bank of England 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, ...