'Returning inflation to the 2% target remains our absolute priority.' credit: Bank of England
Speaking at the Henry Plumb Memorial Lecture, Bailey was unequivocal: «Let me be very clear: it is far too early to be thinking about rate cuts.»
Food price inflation drops to 15 month low
Highlighting the 2.1 percentage point drop seen in UK CPI over October, Bailey said while this was «welcome news, it is much too early to declare victory».
«Inflation remains too high, and we need to make sure we get it all the way down to the 2% target,» he added. «Monetary policy is currently restrictive in the sense that, if we maintain this stance for long enough, we will squeeze inflation out of the system.
»That is what we will do."
Bailey also reasserted that the hiking cycle is not necessarily at an end, with the potential for further rates rises if inflation persists.
UK inflation falls to 4.6% in October
«How long a restrictive stance will be needed will ultimately depend on what the incoming data tell us about the outlook for overall consumer price inflation over the medium term,» he noted. «The MPC's latest projections indicate that monetary policy is likely to need to be restrictive for quite some time yet.
»Returning inflation to the 2% target remains our absolute priority."
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