BoE’s Ramsden: Inflation is expected to increase slightly

Bank of England Deputy Governor Dave Ramsden noted that the UK’s disinflationary trend has stalled, cautioning that inflation could edge slightly higher before peaking

Key Quotes

We have had substantial disinflation until recently.

We expect inflation to increase slightly further, but that will then be the peak.

We have seen the labour market continue to loosen, with wage growth normalising.

I see loosening in the labour market as anchoring the inflation outlook for me.

Important to note the salience of food prices for household inflation expectations.

Household inflation expectations appear to be more sensitive to food prices since 2022.

I do remain confident we will get inflation back to target with current restrictive rates and market expectations.

I have been surprised how long it has taken for wage-setting behaviour to get back in line.

Cannot rule out that there are some structural problems in the labour market.

I see scope for further removal of policy restraint.