BoE's Bailey: Markets underestimating risk of higher-for-longer inflation

Treasury Committee

Financial markets pricing in early rate cuts are relying too much on current data and not enough on future forecasts, and as a result are underestimating the persistence of higher inflation, governor of the Bank of England Andrew Bailey told MPs.

Speaking at a Treasury Select Committee hearing today (21 November), the governor said the market was "putting too much weight on what we see on the current data releases and the fact that we have seen inflation come down quite rapidly".  "That is good news…but we are basically in the same place and saying we are concerned about the potential persistence of inflation as we go through the remainder of the journey down to 2%, and I think the market is underestimating that," he said. UK inflation falls to 4.6% in October Inflation sat at 4.6% in October, down from its level of over 10...