The BoE’s Bailey says the bank could become “more activist” on rate cuts

LONDON (Reuters) – The Bank of England may move faster to cut interest rates if there is more good news on inflation, but conflicts in the Middle East could push oil prices higher, Governor Andrew Bailey told the Guardian newspaper.

There was a chance the BoE could become “a bit more activist” in its approach to cutting interest rates, he added.

The BoE’s benchmark bank rate now stands at 5% after August’s first cut in borrowing costs in four years. Britain’s central bank kept rates on hold last month, but investors expect another quarter-point cut at its November meeting.

The Guardian quoted Bailey as saying he was encouraged that inflationary pressures had proved less persistent than the Bank had feared, although events in the Middle East posed a risk.

“The geopolitical concerns are very serious,” Bailey told the newspaper. “It’s tragic what’s happening. Obviously there are stresses and the real issue then is how it might interact with some markets that are still quite stretched in places.”

There appeared to be “a strong commitment to keeping the (oil) market stable,” he added, but warned: “There is a point beyond which that control could break if things got really bad. You have to keep an eye on this because it could go wrong.”