BoE's Bailey: Rate cuts off the table at the moment

While speaking at a policy panel at the European Central Bank's (ECB) Forum on Central Banking, Bank of Governor (BoE) Andrew Bailey acknowledged that they have a softening economy and labour market.

Key takeaways

"Decision not to raise rates was based on softening economy."

"Rate cuts off the table at the moment."

"We'll return to it in July."

"We have a delayed reaction mechanism to energy prices."

Market reaction

GBP/USD extends its daily slide following these comments and was last seen trading at 1.3220, losing 0.3% on the day.

Bailey holds fire on cuts as soft data clouds the Pound outlook

FXS Speechtracker shows a 6/10 score versus Governor Bailey’s historic 4.7/10, signalling a modestly more impactful appearance. The emphasis on a softening economy and labour market, alongside the decision not to raise rates, leans mildly dovish on growth but stops short of a clear easing bias.

By stating that rate cuts are “off the table at the moment” and will be revisited in July, Bailey injects a hawkish twist that tempers expectations for near-term easing. The reference to a delayed reaction mechanism to energy prices underscores caution on inflation dynamics, reinforcing a wait-and-see stance that keeps the Pound caught between softer domestic data and a central bank unwilling to pre-commit to cuts.