Bank of England Deputy Governor Dave Ramsden said on Monday that the UK’s labour market had softened and wage growth was stabilising, giving him confidence that interest rates could be eased further and inflation would move back toward the BoE’s target.
“We have seen the labour market continue to loosen, with wage growth normalising, and I view this as supporting the ongoing core disinflation process. This underpins my outlook on inflation,” Ramsden said during a panel discussion organised by the European Central Bank in Frankfurt.
Governor Andrew Bailey last week also reiterated that borrowing costs are expected to decline further, though the timing and magnitude will depend on how inflation evolves.
Ramsden added, “I believe the gradual and cautious approach the MPC has taken in lifting policy restraint remains appropriate, and I see room for further easing of policy restraint in the future.”
However, another MPC member, Megan Greene, cautioned on Wednesday that inflation in the UK could turn out stronger than the BoE’s forecasts, suggesting a measured approach to any additional rate cuts.
