BOE Bailey
  • Services inflation is tracking more or less as we thought in February
  • Will adjust bank rate as necessary to return inflation sustainably to medium-term target
  • If evidence of more persistent pressures, then further tightening in policy would be required

His remarks come ahead of the UK CPI data tomorrow, which is expected to show a notable decline in annual headline inflation . But just keep in mind that the April drop in the UK would be akin to the March drop in the Eurozone, which owes much to an adjustment in base effects after the big surge in energy prices last year.

Bailey is trying to sound confident here but much like what we are seeing in the euro area now, it is best not to get ahead of oneself.