Future interest rate calls will be 'tight' - Bailey

The governor of the Bank of England warned on Friday that future interest rate decisions would be "tight", despite inflation easing.

Andrew Bailey acknowledged that there had been "solid progress" in recent months, as higher interest rates curbed demand and price pressures eased.

But speaking at an event organised by the Institute of International Finance in Marrakech, on the sidelines of International Monetary Fund and World Bank meetings, he warned: "Let’s not get carried away, there is an awful lot still to do.

"The last mile really does lean heavily on…restrictive policy."

The BoE left the cost of borrowing at 5.25% in September following 14 consecutive rises, after inflation cooled to an 18-month low of 6.7%

However, inflation remains steeply above its 2% target, and four members of nine-strong Monetary Policy Committee voted in favour of a further hike at the last meeting.

Bailey said: "Our last meeting was such a tight one. As my colleague Huw Pill said this week, they’re going to go on being tight ones." Pill is the BoE’s chief economist.

The MPC is next due to meet on 2 November. Most economists are forecasting no change.