- Current view is a preponderance of downside risks
- Upside risks to inflation low compared to the downward trajectory in output and inflation fundamentals
- I see wage settlements close to or below 3% next year
- Wage inflation will not re-kindle an upward spiral
Taylor, coupled with Dhingra, is the most dovish BoE member, so these comments are not surprising. As a reminder, we got a soft UK labour market report today with the unemployment rate ticking higher and the employment numbers disappointing forecasts. Wage growth, on the other hand, beat expectations as it remains elevated. The market increased the dovish bets on the BoE with two rate cuts fully priced in by the end of 2026.
