Headline: BoE's Bailey: We Cannot Yet Rely on Low Inflation

The Governor of the Bank of England (BoE), Andrew Bailey, stated that the UK cannot yet rely on lower inflation. Speaking in Washington, Bailey mentioned that fluctuations in energy and food prices, along with a potential structural change in the labor market following the global pandemic, could keep inflation elevated for a longer period and influence interest rate decision-making. He highlighted persistent uncertainties about the path of inflation in the coming quarters, pointing to volatility in energy, food, and general goods prices, asking, "Will this disinflation story lead us to sustained low inflation?" Bailey also noted that the COVID-19 pandemic may have caused lasting structural changes in the UK labor market. Earlier this month, the BoE Governor suggested that if inflation reports are positive, the bank might be "a little more aggressive" in cutting interest rates, though he previously emphasized that policymakers would not rush to lower borrowing costs.