BOE's Bailey on Inflation, Rates, Mandelson, Warsh

Summary

Bank of England Governor Andrew Bailey spoke with Bloomberg's Francine Lacqua after the BOE kept rates unchanged. Bailey said further UK rate cuts remain possible and that market pricing of a roughly 50/50 March cut is reasonable, while emphasizing the need for more evidence that inflation will sustainably return to target. He also discussed the resilient global economy, UK supply-side growth challenges, the Mandelson scandal, and Kevin Warsh's Fed chair nomination.

• BOE left rates unchanged but Bailey signaled a prospect of further cuts.
• Bailey called roughly 50/50 market pricing for a March cut reasonable.
• He expects inflation to reach target around spring but wants evidence of sustained disinflation.
• Bailey said the global economy has weathered shocks better than feared.
• He said the UK needs supply-side reforms to raise potential growth.
• Bailey expressed shock over the Mandelson revelations and concern about institutional trust.
• He welcomed Kevin Warsh's Fed chair nomination and saw no spillover worries.
• Two more data releases will arrive before the BOE's next decision.