According to Reuters, Bank of England (BoE) Governor Andrew Bailey stated in an address to the British Chambers of Commerce on Wednesday that there is evidence that the employment market is easing slightly.
“Inflation is far too high, and we must bring it back to our 2% target in a sustainable manner.”
“After the initial recovery in 2020, the level of economic activity, as measured by monthly GDP, has failed to grow beyond its pre-pandemic level on a sustained basis.”
“We recognize that higher interest rates make life difficult for many people, but we also recognize that high inflation always disproportionately affects the least well-off.”
“I’d like to strongly refute a common argument, which is that inflation is high because monetary policy has been lax.” “Things are looking a little better than they did a few months ago.”
“We have reason to believe that inflation will fall sharply in the coming months, beginning with the April figure.”
“As headline inflation falls, second-round effects are unlikely to fade as quickly.”
“The labor market tightening is occurring at a slower rate than we anticipated in February, and the labor market remains very tight.”
BOE statement reaction on market
Following these comments, the GBPUSD managed to recover from a multi-week low at 1.2420. As of this writing, the pair was trading at 1.2463, down 0.2% on the day.
