{"id":79371,"date":"2023-01-19T19:33:03","date_gmt":"2023-01-19T19:33:03","guid":{"rendered":"https:\/\/tahrir2day.com\/news\/2023\/01\/19\/bailey-inflation-likely-to-fall-rapidly-this-year\/"},"modified":"2023-01-19T19:33:03","modified_gmt":"2023-01-19T19:33:03","slug":"bailey-inflation-likely-to-fall-rapidly-this-year","status":"publish","type":"post","link":"https:\/\/tahrir2day.com\/news\/2023\/01\/19\/bailey-inflation-likely-to-fall-rapidly-this-year\/","title":{"rendered":"Bailey: Inflation ‘likely to fall rapidly’ this year"},"content":{"rendered":"
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Inflation is likely to fall quickly this year as energy prices fall, Bank of England Governor Andrew Bailey said.<\/b><\/p>\n<\/div>\n

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Speaking to Media Wales, Mr Bailey said a recent easing in inflation could be a sign that “a corner has been turned”.<\/p>\n<\/div>\n

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The bank is not trying to change market expectations that interest rates will peak at 4.5%, he said.<\/p>\n<\/div>\n

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The pandemic and cost-of-living crisis meant a recession was still looming in the UK, he added.<\/p>\n<\/div>\n

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A key component of inflation – how quickly prices are rising – has been rising energy costs as economies recover from Covid and Russia’s war in Ukraine pushes up oil and gas prices.<\/p>\n<\/div>\n

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But wholesale energy costs have come down in recent weeks and energy bills are higher than previously forecast.<\/p>\n<\/div>\n

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This has made the bank more optimistic that inflation could be on an “easier path”, Mr Bailey said.<\/p>\n<\/div>\n

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However, a large number of vacancies means workers are in a stronger position to negotiate for pay increases, which could help push up prices, he said.<\/p>\n<\/div>\n

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  • UK inflation falls but food keeps inflation high<\/li>\n<\/ul>\n<\/div>\n<\/div>\n
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    The pace of price increases in the UK has slowed slightly, standing at 10.5% by December.<\/p>\n<\/div>\n

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    In October, prices increased by 11.1%. In November, inflation was 10.7%.<\/p>\n<\/div>\n

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    In November, the bank forecast that inflation would fall to 5.2% by the end of 2023 and Mr Bailey maintained that view. The bank will release new forecasts next month.<\/p>\n<\/div>\n

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    The economy has “fell off a cliff” during the Covid pandemic, Mr Bailey said, and while it has partially recovered, wage increases have not kept pace with the pace of price increases, which is still near a 40-year high , said he said.<\/p>\n<\/div>\n

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    That means Britain is still likely to fall into a long, shallow recession, he said.<\/p>\n<\/div>\n

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    Meanwhile, markets are predicting interest rates will peak at 4.5% and the bank is not distracting them, Mr Bailey said.<\/p>\n<\/div>\n

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    Interest rates partly determine how much people pay for mortgages and other loans.<\/p>\n<\/div>\n

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    Last October, markets in the UK were expecting interest rates to peak as high as 6% – partly reflecting the ongoing turmoil sparked by Liz Truss’ short tenure as Prime Minister.<\/p>\n<\/div>\n

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    Financial markets now expect the bank to raise its main interest rate to 4% from 3.5% on February 2, although there could be a smaller quarter-point hike.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Inflation is likely to fall quickly this year as energy prices fall, Bank of England Governor Andrew Bailey said. Speaking to Media Wales, Mr Bailey said a recent easing in inflation could be a sign that “a corner has been turned”. 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