Commenting on the Bank of England's latest decision to cut the Bank Rate by 25 basis points, the central bank's governor Andrew Bailey noted this was a “finely balanced” decision and it was appropriate to adjust policy restrictiveness a little today.
However, he acknowledged that services price inflation and domestic inflation pressures remain elevated and warned that there might be a slight rise in services price inflation in August, before easing for the rest of the year. Bailey stressed that the BoE's policymakers are watching services prices very carefully.
In addition, the UK central bank's boss stated that the BoE should not adjust its course with every data surprise that comes in.
Also, Bailey noted that there is still a question on whether the persistent component of inflation can return to 2% sustainably.