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Bank of England's Bailey speaks after interest rates rise to 4%

Economy Feb 02, 2023 13:31
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© Reuters. FILE PHOTO: People walk outside the Bank of England in the City of London financial district, in London, Britain, January 26, 2023. REUTERS/Henry Nicholls
 
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LONDON (Reuters) - The Bank of England raised interest rates for the 10th time in a row on Thursday but dropped its pledge to keep increasing them "forcefully" if needed and said inflation had probably peaked.

Below are quotes from Governor Andrew Bailey and other BoE policymakers, made during a news conference after the rate decision.

BOE GOVERNOR BAILEY ON INFLATION

"Since the November monetary policy report we've seen the first signs that inflation has turned the corner."

"We have done a lot on rates already. The full effect of that is still to come through. But it's too soon to declare victory just yet, inflationary pressures are still there."

BAILEY ON ECONOMIC INACTIVITY AMONGST 50 -65 YEAR OLDS

"There's also been a marked increase in inactivity amongst 50 to 65 year olds. Many say they've retired early making a choice about the life they would like to live. At the same time, however, many people report that they're affected by long term illness, a number of these people say they're unlikely to come back into the labour market.

"This significant and lingering fall in the labour supply weighs on the UK economy's potential."

BAILEY ON CHANGE IN BOE LANGUAGE

"In the previous language we had a presumption that if the economy evolved as the forecast suggests - that's in November - then we expect there to be further rates increase. We also had that word 'forceful' in there.

"And we have changed both of those points. And I think that reflects the fact that we've now got a combination of what I would call - we have we have seen a turning of the corner, but it's very early days and the risks are very large and it's really that that I think shapes where we where we go from here."

BOE DEPUTY GOVERNOR BEN BROADBENT ON INFLATION RISK

"The risks are still to the upside ... it's not obvious to me looking at this, or looking at what we've written, that somehow we know we've got to a point where there's a peak, or even that the next (bank rate) move is equally likely in one direction or the other.

"I think the committee is still very watchful."

BOADBENT ON BREXIT

"Brexit ... has been something that has pulled down potential output in our country in our assessment for many years. We've not changed our estimate of the long run effects but we've brought some of them forward. We think probably they're coming in faster than we first expected."

BAILEY ON PRIVATE SECTOR WAGE SETTLEMENTS

"We have been surprised on the upside by private sector wage settlements so that they are higher than we thought they would be in the November report, that is the case."

Bank of England's Bailey speaks after interest rates rise to 4%
 

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