Economic Outlook Remains Uncertain

Bank of England (BoE) Governor Andrew Bailey highlighted the reduced likelihood of second-round inflation effects due to the UK's economic slowdown. During a Treasury Committee hearing, Bailey remarked, "We do expect and are beginning to see a pickup in inflation, [but] it's nothing like we saw a few years ago." He attributed the primary drivers of this inflation uptick to energy and food prices.

Vigilance Against New Shocks

Bailey emphasized the uncertainty of the economic outlook, noting that risks are two-sided. Echoing this sentiment, BoE Chief Economist Huw Pill stressed the importance of staying vigilant against "new shocks." Pill further stated that the evidence leads him to believe that more rapid interest rate cuts are not on the horizon.