Bank of England Governor Andrew Bailey has expressed confidence that he is confident UK inflation will approach its 2% target in the coming months, following the central bank's recent decision to cut interest rates.
Bailey expressed his confidence after seeing stronger signs that inflation is on a continued downward trajectory.
He also said that a rate cut is warranted at this stage, as price pressures are easing and inflation expectations are improving.
However, Bailey warned that central banks need to take a more cautious approach as interest rates approach neutral.
He said that while inflation is expected to continue to decline, the risk of policy mistakes increases as rates approach equilibrium.
