Bailey positive that inflation will fall “markedly” this year

Speaking at the annual Mansion House dinner, he explained this’ll largely be driven by “lower energy prices” as last year’s “substantial increases” drop out of the annual calculation. He added: “Food prices should fall too as lower commodity prices feed through to prices in the shops. 

“However, while the level of economic activity has failed to grow beyond its pre-pandemic level on a sustained basis, the UK economy has shown unexpected resilience in other ways in the face of these substantial – in some cases unprecedented – external shocks.” 

Bailey’s assertions come despite the slow rate at which inflation has come down by since its of 11.1% back in October – remaining unchanged at 8.7% in its most recent release for the 12 months to May.  

To deal with these inflationary pressures, monetary policy has been tightened – with bank rates rising by nearly five percentage points over the last 20 months in an effort to bring inflation down to its two percent target. Bailey as said the Bank of England’s monetary policy is monitoring developments to assess whether pressure are proving “more persistent”.