Bank of England governor Andrew Bailey has said he sees interest rates on a "downward" trajectory after August’s 0.25% cut.
Bailey told the Kent Messenger newspaper on Tuesday that he was “very encouraged” by inflation, after price rises peaked at 11.1% in 2022 before scaling back to 2.2% come August.
“Inflation has come down a long way,” Bailey commented, “I do think the path for interest rates will be downwards, gradually”.
The central bank had initially cut interest from 5.25% in August but opted to leave the base rate unchanged earlier this month.
Bailey added: “We still have to get [inflation] sustainably at the target and we have quite an unbalanced mix of components of inflation at the moment.”
August's cut marked the first to base interest in over four years, with markets pricing in reductions to 4.5% by 2025 and 3.5% come 2026.
"Where it will settle is a good question," Bailey continued, "simple answer is I can’t tell you with any great accuracy".
He suggested a fall back to 0.1% seen during the pandemic was unlikely, given inflation shocks since such as the war in Ukraine.