Bailey speech: Gradual approach to removing policy restraint will help observe risks to inflation outlook

Bank of England (BoE) Governor Andrew Bailey testifies on the November Monetary Policy Report (MPR) before the UK Parliament's Treasury Select Committee (TSC) on Tuesday. 

Key quotes

Services inflation is still above a level that's compatible with on-target inflation.

We need to watch services inflation very carefully, reflects labour market developments.

A gradual approach to removing monetary policy restraint will help us to observe risks the inflation outlook.

Most important part of budget is how businesses respond to higher employment costs.

Recent evidence has been that inflation has been lower than expected but we don't know if that will continue.

British Retail Consortium right to say that there is a risk of a bigger reduction in employment after national insurance rise.

Past labour hoarding may make it easier for businesses to cut employment now.

We should approach all areas of the world as countries we trade with, need to be in active dialogue with US and EU.

Outcomes of financial services after Brexit have been less bad than we feared in 2016.

Market reaction

At the time of writing, GBP/USD is trading at around 1.2630, down 0.30% on a daily basis.

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