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BOE: We are on track to reduce inflation to target – Andrew Bailey

Bank of England (BoE) Governor Andrew Bailey, speaking at the Henry Plumb Memorial Lecture, noted that although inflation has far exceeded the BoE’s main targets, signs are emerging that runaway prices, particularly in the food sector, are beginning to recover.

BoE Governor Bailey noted that headline inflation far exceeded the British central bank’s main target of 2%, peaking at 11.1% in October 2022. Even though British inflation fell to 4.6% in As of the latest data readout, there is still a long way to go before we reach the 2% target again, and Governor Bailey warns that it is certainly too early to “declare victory” on inflation.

Food and beverage inflation rose to 19.1% in March 2023, contributing 2 full percentage points to headline inflation. Bailey noted that food inflation remains above 10% since October, and the BOE expects food price growth to slow to 3% by the end of the short-term forecast cycle in March 2024. .

Market reaction

Bank of England Governor Bailey’s speech did little to boost British Pound (GBP) markets, with GBP/USD still trading near the 1.2500 area on Monday.

Source: Fx Street

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