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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bank of England Governor

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Speaker 1: Andrew Bailey caution markets against reading too much into how

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Speaker 1: policymakers voted this month. He spoke with Bloomberg's Guy Johnson

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Speaker 1: after officials decided to cut interest rates to a nineteen

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Speaker 1: month low.

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Speaker 2: You've used the words gradual and careful, so I'll try

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Speaker 2: to sort of provide some explanation and hope it helps.

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Speaker 2: Word gradual is not new. We've been using it for

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Speaker 2: some time and the reason for using that word is

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Speaker 2: because we think that there is an underlying path of

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Speaker 2: disinflation and that's supporting us cutting rates. That disinflation is

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Speaker 2: all about the sort of the erosion of the persistence

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Speaker 2: of inflation that we had coming out of the very big,

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Speaker 2: obviously shocks that we had few years ago. Now we

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Speaker 2: haven't changed off beyond that. We think that we are

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Speaker 2: seeing this path at disinflation and that's why we've cut

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Speaker 2: rates today. But we have to go on watching that

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Speaker 2: carefully to see whether it will continue. So nothing changed

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Speaker 2: on that front. Why have we introduced the word careful?

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Speaker 2: There is an awful lot of uncertainty around in the

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Speaker 2: world around us. I'm afraid at the moment, and I

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Speaker 2: would just emphasize, as we've said today that that uncertainty

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Speaker 2: is two sided. It's on both sides. So let me

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Speaker 2: just sort of draw that out. We' seen weak activity

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Speaker 2: in the UK economy. The question is to what it sent?

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Speaker 2: Is that a weakening of demand? To what I sent,

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Speaker 2: it is a weakening of the supply capacity of the economy.

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Speaker 2: And what mixture of the two is it, because that's

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Speaker 2: critical because one of them leads to lower inflation, the

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Speaker 2: other leads to higher inflation. It's very hard to read

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Speaker 2: at the moment, so that's one of the critical things.

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Speaker 2: And then we've got more uncertainty around us. We've got

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Speaker 2: we are going to get to pick up an inflation

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Speaker 2: over the coming months. We don't think that will of

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Speaker 2: course persistent effects, but we're going to have to watch

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Speaker 2: it very carefully. And to finish, the world around us

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Speaker 2: is a very uncertain place at the moment.

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Speaker 3: Okay, from the starting point of gradual means once a

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Speaker 3: a what you are saying, never said that? Okay, Okay,

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Speaker 3: that has been the implication the market is inferred that

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Speaker 3: that is what that means. You've inserted careful, does that

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Speaker 3: mean you have to wait just in terms of the

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Speaker 3: timing around the when rate cuts are going to come.

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Speaker 3: Do you need more information so that that effectively the

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Speaker 3: cuts are more backloaded because you need more information before

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Speaker 3: you can make a decision.

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Speaker 2: And when the way I know, the way I would inserted,

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Speaker 2: is this the sort of the set of things that

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Speaker 2: we are going to have to judge every time we

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Speaker 2: meet has just got more complicated.

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Speaker 3: Frankly, don't make it harder to make a decision to

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Speaker 3: cut rates because as you say, it's symmetrically you don't

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Speaker 3: know whether.

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Speaker 2: It's it's going to give us a lot more to

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Speaker 2: think about it every time, and we're going to be

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Speaker 2: careful in the way we do it. But it's meant

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Speaker 2: to say, look, there is more uncertainty. Don't take from

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Speaker 2: that a particular directional message other than I still think

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Speaker 2: the path is down yep, but the world is more uncertain.

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Speaker 3: Are you still trying to get to one hundred basis

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Speaker 3: points worth a cup this year?

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Speaker 2: Well, I've never been trying to get to a number. Actually,

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Speaker 2: I mean, I'm trying to get inflation sustainably to target.

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Speaker 2: That's my dread. Whatever whatever path of the interest rates

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Speaker 2: does it will be the one.

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Speaker 3: Can you understand why the vote split looks stubbish?

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Speaker 2: I can, but I would always caution you not to

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Speaker 2: put much right.

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Speaker 3: So it's not a communication tool.

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Speaker 2: It's not a communication tool. And the reason it's not

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Speaker 2: a communication we do not sit down and say what

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Speaker 2: should we what do we want the vote split to be?

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Speaker 2: This time? Each member votes their own position. I don't

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Speaker 2: know going in what the vote's going to be. In

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Speaker 2: that sense, there reason, and I always say there's no

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Speaker 2: group think on the MPC. People vote their own position.

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Speaker 2: You can, and I would always I would encourage the

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Speaker 2: market to read the minutes pretty carefully this time, because

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Speaker 2: you will see a series of positions set out in

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Speaker 2: the voting. You know, there are there are those of

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Speaker 2: us who voted for the cut, some of whom put

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Speaker 2: emphasis on uncertainty and the word careful, some of whom

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Speaker 2: wanted it to be a bit more directional and wanted

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Speaker 2: the work cautious and so careful. But we're just careful

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Speaker 2: in the end. And then you've got the two members

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Speaker 2: who voted for a larger cut, and if you read

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Speaker 2: the paragraph that comes over, they're probably in different places themselves.

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Speaker 2: So don't put too much weight on the voting.

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Speaker 1: That's Bank of England Governor Andrew Bailey speaking with Bloomberg

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Speaker 1: Sky Johnson