Andrew Bailey, governor of the Bank of England, at the central bank’s headquarters in the City of London, U.K., on Nov. 29, 2024.
Hollie Adams | Bloomberg | Getty Images
Bank of England Governor Andrew Bailey on Wednesday signaled that the U.K. could be on track for four interest rate cuts over the next year, if inflation continues on a downward path.
Asked during a Financial Times video interview whether the central bank would be poised to carry out four quarter-point cuts over the coming year, if its projections of “a little bit of [inflation] persistence” come to fruition, Bailey responded, “Exactly.”
Markets are currently pricing in a hold on interest rates at the Bank of England’s December meeting, according to LSEG data, followed by three 25-basis-point rate cuts.
The BoE governor added that inflation had come down faster than the central bank had anticipated.
“A year ago, we were saying that inflation today would be around 1% higher than it actually is,” he said during the interview. “And that, I think, is a good test of the [central banking] regime.”
This is a breaking news story and will be updated shortly.