BoE/Bailey: UK could cut interest rates before US
Bank of England Governor Andrew Bailey signaled that England may reduce interest rates before the USA.
Bank of England Governor Andrew Bailey said that the inflation dynamics in the two economies have differed and signaled that England may reduce interest rates before the USA.
There is more “demand-driven inflation pressure” in the US than seen in the UK, Bailey said on Tuesday, after surprisingly strong price data in America last week spooked markets. He said there was “strong evidence” that price pressures in the UK were receding.
“The dynamics of inflation are quite different in Europe, so geographically now, between Europe and the US. In the UK we are still seeing the prolongation of the recovery from major supply shocks, the impact of the war, the impact of the recovery from Covid,” he said in an interview with the IMF.
The comments suggest Bailey sees little threat that Britain will experience a similar resurgence in inflation seen in US price data for March last week.