BOE's Bailey: I'm 'very encouraged' by progress in hitting inflation target

• I expect UK CPI to fall to near 2% target in April or May 2026
• Policy stance is still restrictive but I expected pace of cuts to ease at some point

This is perhaps less hawkish than I would have expected from the BOE statement earlier. He is still talking about rate cuts and inflation falling to 2% would certainly give him some latitude to tee-up cuts next year.

Cable has retreated to just below 1.3400 from a high of 1.3446 but it has been caught up in a fair bit of USD volatility today as well. There has been no reaction to the latest comments.