It is still too early to declare victory over inflation

Bank of England (BoE) Governor Andrew noted on Friday evening that inflation still remains a key sticking point for Britain’s central bank, although many price pressures have eased faster than the BoE initially feared.

Key highlights

Market events like the two weeks ago will happen; the test is not whether it happens, but whether it triggers wider instability.

The effects of second-round inflation appear to be smaller than expected.

Communicating when we decide to deal with short-term shocks or trade-offs between inflation and activity is essential but difficult.

It is too early to declare victory over inflation.

I am cautiously optimistic that inflationary expectations are better anchored.

Signs of disinflation are coming from China.

Less persistent inflation is not something we can take for granted.

The policy setting will need to remain restrictive long enough.

Inflation has not returned to target on a sustained basis.

We need to steer a steady course on monetary policy.