LONDON (Reuters) – The Bank of England could move less gradually in cutting interest rates if inflation continues to surprise to the downside, Governor Andrew Bailey said on Thursday.
Bailey said the BoE’s central view was that it would only be able to cut rates gradually, but he added that inflation had fallen faster than the central bank had expected in August.
“If that progress continues, then we will respond to it,” he told reporters during a press conference.
Responding to an earlier question, Bailey said he would not specify if gradual rate cuts meant a quarterly pace of reductions to borrowing costs.
His comments came after the BoE cut interest rates for only the second time since 2020 and said future reductions were likely to be gradual, seeing higher inflation and economic growth after the new government’s first budget.
(Reporting by Suban Abdulla, David Milliken and Andy Bruce; Writing by Catarina Demony; Editing by William Schomberg)
