“I think that the path of interest rates will continue to be gradually downwards,” he said in an interview with CNBC. “I haven’t changed my mind on that.”
Still, Bailey cautioned against assuming an August move is guaranteed, citing ongoing concerns over inflation. “We’ll see,” he said when pressed on the likelihood of a rate cut at the next meeting.
“There will be no sustained growth unless we have stable, low inflation,” Bailey added. “That’s a sort of almost written on the heart of all central banks. I’m not trying to, in any sense, crush growth.”
In June, the central bank left its benchmark rate unchanged at 4.25%, maintaining a cautious approach amid persistent inflation and patchy economic data. Despite some easing in global conditions — including stabilising markets and falling oil prices — Bailey highlighted lingering business uncertainty stemming from geopolitical risks.
“That increase in uncertainty and unpredictability is definitely coming through in terms of activity and growth,” he said. “When I go around the country talking to businesses, which I do a lot, what they tell me is that they are putting off investment decisions.”