WEBVTT - BoE Governor Andrew Bailey Talks Wages, Interest Trajectory

0:00:02.600 --> 0:00:08.559
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. We've had to look

0:00:08.560 --> 0:00:11.680
<v Speaker 1>at all the evidence. There is quite a lot of

0:00:11.760 --> 0:00:14.520
<v Speaker 1>uncertainty in the world at large. But I do think

0:00:14.520 --> 0:00:17.120
<v Speaker 1>that the course of interest rates the path is downwards,

0:00:17.560 --> 0:00:19.800
<v Speaker 1>but there is more uncertainty around and so we had

0:00:19.800 --> 0:00:22.720
<v Speaker 1>to weigh that up very carefully, and I think the

0:00:22.760 --> 0:00:25.560
<v Speaker 1>appropriate thing to do this meeting was to keep interstraights

0:00:25.600 --> 0:00:27.080
<v Speaker 1>on hold. But we'll come back at the beginning of

0:00:27.080 --> 0:00:29.800
<v Speaker 1>February for our next meeting and start it all over

0:00:29.840 --> 0:00:33.040
<v Speaker 1>again and review the evidence. But I think the fact

0:00:33.040 --> 0:00:34.680
<v Speaker 1>that there is a difference of view within the committee,

0:00:34.720 --> 0:00:36.600
<v Speaker 1>I think first of all, I think it underlines the

0:00:36.640 --> 0:00:39.280
<v Speaker 1>strength of that process. There's no group think on the NPC.

0:00:40.040 --> 0:00:42.000
<v Speaker 1>Reasonable people can take a different view at this point,

0:00:42.000 --> 0:00:44.520
<v Speaker 1>and that's exactly what they've done. Markets have to form

0:00:44.560 --> 0:00:48.440
<v Speaker 1>their view. I would say this, I think the path

0:00:48.520 --> 0:00:52.320
<v Speaker 1>is downwards, but I really would caution that the stage

0:00:52.320 --> 0:00:55.240
<v Speaker 1>with the amount of uncertainty, we can't tell you by

0:00:55.280 --> 0:00:58.840
<v Speaker 1>how much when particular moves are going to take place,

0:01:00.160 --> 0:01:02.040
<v Speaker 1>as the world is two uncertain So we will come

0:01:02.080 --> 0:01:04.840
<v Speaker 1>back in February at our next meeting and review it again.

0:01:04.959 --> 0:01:07.320
<v Speaker 1>And that's important and I think you can see that

0:01:07.400 --> 0:01:10.280
<v Speaker 1>in immediate market pricing. The market says, well, they might

0:01:10.319 --> 0:01:13.920
<v Speaker 1>cut in February, they might not pretty reasonable starting point.

0:01:14.160 --> 0:01:15.680
<v Speaker 1>I think we're now back in what I would call

0:01:15.720 --> 0:01:18.320
<v Speaker 1>more normal conditions, or when we were going through the

0:01:18.360 --> 0:01:22.160
<v Speaker 1>COVID period, you know, the labor market wasn't it wasn't

0:01:22.200 --> 0:01:24.880
<v Speaker 1>functioning as normal. So so wages are set in markets,

0:01:25.600 --> 0:01:27.560
<v Speaker 1>that's important. And we're at the Bank of England when

0:01:27.600 --> 0:01:30.840
<v Speaker 1>we determine interest rates respond to how those the evidence

0:01:30.880 --> 0:01:32.960
<v Speaker 1>that we see. I would caution a bit on the

0:01:33.040 --> 0:01:35.360
<v Speaker 1>numbers we've seen this week. There were a bit of

0:01:35.400 --> 0:01:39.600
<v Speaker 1>a surprise. I think espicely everybody actually now there was

0:01:39.720 --> 0:01:41.440
<v Speaker 1>quite a bit of noise in the data coming from

0:01:41.520 --> 0:01:43.960
<v Speaker 1>things that happened a year ago. There was a fairly

0:01:44.040 --> 0:01:46.520
<v Speaker 1>unusual fall in the rate of growth of wages last

0:01:46.560 --> 0:01:48.600
<v Speaker 1>year this time last year, which didn't last and that's

0:01:48.640 --> 0:01:50.760
<v Speaker 1>coming out of the series. So just a bit of

0:01:50.800 --> 0:01:53.280
<v Speaker 1>caution there that what we're really interested in is how

0:01:53.320 --> 0:01:57.000
<v Speaker 1>much momentum are we seeing now. So there was a

0:01:57.040 --> 0:01:58.840
<v Speaker 1>bit of a surprise, but it's nothing like what you

0:01:58.880 --> 0:02:01.320
<v Speaker 1>saw in the headline number. When I look at markets,

0:02:02.120 --> 0:02:04.480
<v Speaker 1>I think for quite one. Our markets have really not

0:02:04.480 --> 0:02:06.360
<v Speaker 1>been expecting us to move rates at this meeting, So

0:02:06.360 --> 0:02:08.079
<v Speaker 1>I don't think you should regard anything we did today

0:02:08.080 --> 0:02:10.960
<v Speaker 1>as a surprise in that sense. It isn't. We are

0:02:11.000 --> 0:02:14.040
<v Speaker 1>looking very carefully at the economy. We're looking very carefully

0:02:14.040 --> 0:02:16.840
<v Speaker 1>at the degree of uncertainty. I think today you know

0:02:17.000 --> 0:02:19.880
<v Speaker 1>the right decision was to hold and say we'll come

0:02:19.960 --> 0:02:22.720
<v Speaker 1>back to it. So there's no surprise in that. Really,