BoE Bailey: Market’s rate cut outlook not unreasonable, yet unendorsed

In a session with the Treasury Select Committee today, BoE Governor Andrew Bailey acknowledged that It’s “not unreasonable” for the market to think about reductions in interest rates this year

However, he was quick to qualify this by stating that MPC “do not endorse the market curve” forecasting such cuts, adding that “we are not making a prediction of when or by how much” BoE cuts interest rates.

Bailey pointed to “encouraging signs” in key economic indicators, but stressed the importance of “sustained progress” in tackling inflation.

Addressing recent data indicating the UK’s entry into a technical recession in the latter half of the previous year, Bailey downplayed its impact, describing the downturn as “very weak” and pointing to “distinct signs of an upturn.”