CITY AM – Clear As Mud
City is ‘paying too much attention’ to inflation data, says bank governor
CITY AM SAYS The Bank of England governor Andrew Bailey further confused the City yesterday on the future path of interest rates, speculating that inflation could be more persistent than the Square Mile expects.
Although the headline rate of inflation fell to 4.6 per cent in October from 6.7 per cent the month before, Bailey pointed out that domestic price pressures remained strong.
“We are concerned about the potential persistence of inflation as we go through the remainder of the journey down to two per cent. I think the market is underestimating that,” he said during an appearance in front of the Treasury Select Committee.
Markets currently expect the Bank to start cutting interest rates in the summer of next year, with the benchmark Bank Rate expected to stand at 4.5 per cent by the end of 2024.
Catch up on all the business pages here
