1 00:00:00,160 --> 00:00:04,840 Speaker 1: I think we've now changed the question really from how 2 00:00:04,840 --> 00:00:07,280 Speaker 1: restrictive do we need to be for how long do 3 00:00:07,360 --> 00:00:09,840 Speaker 1: we need to be restricted? That's important. We've also taken 4 00:00:09,960 --> 00:00:14,440 Speaker 1: the upside bias off. We have in cleared a risk, 5 00:00:14,520 --> 00:00:16,600 Speaker 1: by the way, a new risk actually, which is we're 6 00:00:16,600 --> 00:00:18,880 Speaker 1: really reflecting obviously sort of tragic events of them at 7 00:00:18,960 --> 00:00:21,400 Speaker 1: least and the impact that can have through the red 8 00:00:21,440 --> 00:00:25,599 Speaker 1: sea effects. So I think now the question is for 9 00:00:25,720 --> 00:00:27,720 Speaker 1: us as really is for how long do we need 10 00:00:27,760 --> 00:00:32,319 Speaker 1: to maintain this stance going forwards? As you know I've 11 00:00:32,320 --> 00:00:34,560 Speaker 1: said a number of times, we're going We're not making 12 00:00:34,600 --> 00:00:40,440 Speaker 1: predictions at this point, we're setting up the framework. The 13 00:00:40,479 --> 00:00:42,680 Speaker 1: things that we think are important to look at really 14 00:00:42,720 --> 00:00:47,040 Speaker 1: haven't changed. Actually, so services inflation, aspects of the labor market, 15 00:00:47,479 --> 00:00:50,519 Speaker 1: the domestic drivers of inflation. Because these global shocks, I 16 00:00:50,560 --> 00:00:53,880 Speaker 1: think we're now seeing the disinflation side of the global shocks. 17 00:00:54,560 --> 00:00:57,160 Speaker 2: Is there a specific is it wage growth? Is there 18 00:00:57,200 --> 00:00:59,120 Speaker 2: something specific in the seat of numbers that you look 19 00:00:59,160 --> 00:01:01,720 Speaker 2: at that will get view the impetus to cut. 20 00:01:02,320 --> 00:01:04,440 Speaker 1: Well, I think a number of things. I mean services inflation, 21 00:01:04,480 --> 00:01:06,080 Speaker 1: I mean it's still at six point four percent, so 22 00:01:06,080 --> 00:01:08,520 Speaker 1: it's still well above anything that I would say it's 23 00:01:08,560 --> 00:01:11,560 Speaker 1: consistent with us consistently meeting the target. First of all, 24 00:01:11,920 --> 00:01:14,720 Speaker 1: I think with wage growth, we have seen the official 25 00:01:14,760 --> 00:01:17,560 Speaker 1: measure come down. It's below where we thought it would be. 26 00:01:18,280 --> 00:01:20,440 Speaker 1: Open question really as to whether that was a sort 27 00:01:20,480 --> 00:01:22,760 Speaker 1: of bit of an adjustment of some anomalies in that 28 00:01:22,840 --> 00:01:26,920 Speaker 1: index or whether that's really is a move, But it doesn't. 29 00:01:27,520 --> 00:01:30,840 Speaker 1: It's now in line with the other things we look at. Again, Yeah, 30 00:01:30,880 --> 00:01:33,880 Speaker 1: there are above frankly levels that are consistent with putting 31 00:01:33,880 --> 00:01:36,880 Speaker 1: the target. But I think the important thing there is, Look, 32 00:01:37,200 --> 00:01:39,679 Speaker 1: inflation has come down a long way head might inflation 33 00:01:41,640 --> 00:01:43,080 Speaker 1: we think it's going to come down further on the. 34 00:01:43,000 --> 00:01:44,760 Speaker 2: Shop is that thanks to the Bank of England policy. 35 00:01:45,640 --> 00:01:47,960 Speaker 1: Well, I think, well two things there. First of all, 36 00:01:47,960 --> 00:01:51,600 Speaker 1: I think it's the major driver of that is the 37 00:01:51,640 --> 00:01:54,680 Speaker 1: disinflation side of the global shocks. What Bank of England 38 00:01:54,680 --> 00:01:57,200 Speaker 1: policy that has done, and I've been saying for some time, 39 00:01:57,440 --> 00:02:00,240 Speaker 1: I think, is to prevent it becoming a me stick 40 00:02:00,440 --> 00:02:04,200 Speaker 1: embedded technical second round effects. That's what and we always 41 00:02:04,200 --> 00:02:07,280 Speaker 1: said that's what we can do. We can't stop global shocks. Yeah, 42 00:02:07,320 --> 00:02:09,639 Speaker 1: I wish, obviously, we all wish we could stop wars, 43 00:02:09,680 --> 00:02:12,920 Speaker 1: but we can't in that suends three largely policy. So 44 00:02:13,520 --> 00:02:15,720 Speaker 1: our job is to stop it becoming embedded. 45 00:02:16,360 --> 00:02:19,800 Speaker 2: Governor So J. Powell yesterday pushed back against expectations for 46 00:02:19,840 --> 00:02:23,000 Speaker 2: a March rate cut. Markets are pricing in some kind 47 00:02:23,000 --> 00:02:24,359 Speaker 2: of cut in May or June. 48 00:02:24,440 --> 00:02:29,240 Speaker 1: Is that fair? Well? I think markets, I think while 49 00:02:29,280 --> 00:02:32,079 Speaker 1: responding to the facts again that we have been we've 50 00:02:32,080 --> 00:02:34,280 Speaker 1: now set out in a sense our framework and said 51 00:02:34,840 --> 00:02:36,520 Speaker 1: the question for us is for how long? I think 52 00:02:36,560 --> 00:02:38,440 Speaker 1: markets are coming up with their own answer that which, 53 00:02:38,480 --> 00:02:41,079 Speaker 1: of course they will, and that's quite reasonable. Our four 54 00:02:41,160 --> 00:02:43,400 Speaker 1: cust of course, is conditioned on their view, but it's 55 00:02:43,440 --> 00:02:46,520 Speaker 1: not our only judgment, and we will decide now meeting 56 00:02:46,560 --> 00:02:47,040 Speaker 1: by meeting. 57 00:02:47,520 --> 00:02:50,360 Speaker 2: Governor. Why are you so afraid of actually committing to 58 00:02:50,400 --> 00:02:52,880 Speaker 2: a cut next time? Is it because you're worried about 59 00:02:52,880 --> 00:02:55,760 Speaker 2: inflation coming back? Are you worried about you know, the 60 00:02:55,800 --> 00:02:58,960 Speaker 2: budget that's coming up in March, or are you worried 61 00:02:58,960 --> 00:02:59,920 Speaker 2: about having to reverse call? 62 00:03:01,000 --> 00:03:03,040 Speaker 1: Well, there are really two reasons. Actually, One is that 63 00:03:03,240 --> 00:03:05,880 Speaker 1: was the evidence. We always want to see the evidence, 64 00:03:06,280 --> 00:03:08,360 Speaker 1: and the world is And the second is the world 65 00:03:08,400 --> 00:03:11,560 Speaker 1: is still a fairly uncertain place. There are still things 66 00:03:11,600 --> 00:03:13,880 Speaker 1: going on in the world, which you know, I would say, 67 00:03:13,880 --> 00:03:15,919 Speaker 1: are not the normal course of events in the world 68 00:03:15,919 --> 00:03:18,760 Speaker 1: and can have quite big effects, and so we want 69 00:03:18,800 --> 00:03:21,480 Speaker 1: to see how these how these influences, you know, the 70 00:03:22,960 --> 00:03:26,680 Speaker 1: evidence that is vital to us, like an insurance policy. 71 00:03:27,639 --> 00:03:30,480 Speaker 1: It's a question really of being too soon to conclude 72 00:03:31,840 --> 00:03:36,560 Speaker 1: that we're on that sustained path to target, but I 73 00:03:36,600 --> 00:03:39,240 Speaker 1: hope we'll be there, you know, for long. 74 00:03:39,320 --> 00:03:41,520 Speaker 2: Do you think that the UK was in a recession 75 00:03:41,840 --> 00:03:45,920 Speaker 2: in the last couple of months of twenty twenty three, Well, we. 76 00:03:45,880 --> 00:03:50,560 Speaker 1: Don't have a recession in the forecast we've published today. Frankly, 77 00:03:50,840 --> 00:03:53,640 Speaker 1: it's it's in the ballots, I think, you know, because 78 00:03:54,680 --> 00:03:58,160 Speaker 1: you can have small margins either way. We don't actually 79 00:03:58,160 --> 00:04:00,960 Speaker 1: have a recession, and I think just emersized perhaps a 80 00:04:00,960 --> 00:04:03,360 Speaker 1: point that's even more important. I think there are clear 81 00:04:03,440 --> 00:04:06,200 Speaker 1: signs with the indicators in the UK that we've seen 82 00:04:06,280 --> 00:04:09,160 Speaker 1: some pick up in indicators really around the turn of 83 00:04:09,160 --> 00:04:11,720 Speaker 1: the year and going through January. So I think that's 84 00:04:11,720 --> 00:04:14,280 Speaker 1: a positive signal, and that's why it helps to explain 85 00:04:14,320 --> 00:04:17,719 Speaker 1: why in our projections, our forecast we've actually got a 86 00:04:17,720 --> 00:04:18,920 Speaker 1: gradual pickup in growth. 87 00:04:19,240 --> 00:04:21,640 Speaker 2: But it's quite difficult to explain to someone who needs 88 00:04:21,680 --> 00:04:24,919 Speaker 2: to decide whether to remortgage or not. Given everything seems 89 00:04:24,920 --> 00:04:26,440 Speaker 2: to be really hanging on a balance, how would you 90 00:04:26,520 --> 00:04:28,159 Speaker 2: describe the economy? 91 00:04:28,760 --> 00:04:31,400 Speaker 1: Well, I think we are seeing still subdued growth, but 92 00:04:31,440 --> 00:04:34,880 Speaker 1: we're seeing some signs of a pickup in activity. I 93 00:04:34,960 --> 00:04:39,760 Speaker 1: think we've seen actually stronger and unpleased about this than 94 00:04:39,760 --> 00:04:43,719 Speaker 1: we expected. How sold real incomes unemployment has not risen 95 00:04:43,760 --> 00:04:46,479 Speaker 1: as we thought it. Well, that's good news obviously as well, 96 00:04:47,560 --> 00:04:50,840 Speaker 1: and those things are now being reflected through into what 97 00:04:50,880 --> 00:04:54,800 Speaker 1: we see as a gradual pickup in economic activity going forwards.