Overview

• Deputy Governor Sarah Breeden said recent price pressures look like a passing hump and cautioned that overly restrictive policy risks weaker output, job losses, and inflation undershooting the 2% target.
• Speaking at Cardiff Business School, she said she will watch firms’ price-setting closely, noting lingering signs consistent with a high-inflation regime.
• The MPC kept Bank Rate at 4% in September after a 25-basis-point reduction in August that passed by a 5–4 vote.
• Bank of England projections point to headline inflation around 4% in September and a slow return to 2% by 2027.
• Colleagues voiced contrasting views, with Catherine Mann, Clare Lombardelli, and Megan Greene urging caution as Andrew Bailey reiterated that rates will come down, and traders have pared back near-term cut expectations.