Inflation has “turned the corner”, according to Bank of England governor Andrew Bailey.
Speaking to the Commons Treasury committee yesterday, Bailey said the central bank had “very big lessons to learn” after underestimating the impact of a series of shocks on the British economy, including the Covid pandemic and Russia’s war in Ukraine.
The bank’s monetary policy committee said inflation would fall back to 2% by early 2025. The International Monetary Fund said its forecast for 2% inflation had been pushed back to the middle of 2025 due to the strength of the labour market and the rising price of goods and services.
Official data due to be released today is expected to show a sharp drop in headline inflation to about 8.4%, the lowest since June last year.
Huw Pill, the bank’s chief economist, added: “We recognise that our forecasts of inflation have been too low and we are trying to understand why we have made those errors.”
