Inflation Projection Indicates a Decline
The Bank's projection indicates that inflation will probably fall below 5% by the end of the year. Bailey attributes the decline to energy prices and strong base effects.
The Wedge Between Private and Public Sector Pay
Bailey was questioned on the impact of big pay rises on inflation and noted a growing gap between private and public sector pay growth. He stated that the impact of pay rises on inflation depends on how it's funded, but the Bank of England would not want to be involved in this territory.
Urges Forward Thinking on Pay Demands
Bailey urged all parties to be forward-looking in terms of pay demands and consider the expected rapid fall in inflation.
Interest Rates 'Too High Right Now
MPC member Silvana Tenreyro stated that a fall in inflation is guaranteed but warned that only a fifth of the recent interest rate rises has affected the economy.
