BoE's Andrew Bailey: 'There is an awful lot still to do' to bring inflation down to 2% - reports

investmentweek.co.uk:

Andrew Bailey (pictured) said the 'last mile' in the fight against inflation will be the toughest yet.

Speaking at the International Monetary Fund's annual meeting in Marrakesh, Bailey said «there is an awful lot still to do» to bring inflation down to the central bank's 2% target, and the «last mile» will be the toughest yet, according to reports by The Times.

Inflation came in at 6.7% in August 2023, down from its 11.1% peak in October last year. Figures for September are forecast to be around 6.6% — a small drop from the previous month, but still more than triple the BoE's target.

Bank of England's Pill: Rate decisions now 'finely balanced'

The figures will be key for the central bank's monetary policy committee, the next meeting of which is scheduled for November, after it decided to hold rates at 5.25% in September, after nearly two years of continuous hikes.

"[Monetary] policy is operating in a restrictive fashion and that is what it needs to do […] it does have an effect," Bailey said. «If we do not get inflation back to target sustainably, the economic outlook will be worse. The last mile leans heavily on restrictive policy.»

He added the impact of supply constraints on high inflation over the last two years have taught central banks vital lessons, and urged the government to take «supportive measures» to boost the supply of workers, following record levels of people leaving employment due to long-term illness following the pandemic.

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