The media reports that Bank of England Governor Andrew Bailey, as part of his Friday speech, will make a positive statement about the progress that the United Kingdom has been able to achieve in implementing measures and taking actions aimed at countering the inflationary process, but at the same time will note that restrictive monetary policy may continue for a longer time due to labor market shocks.

Mr. Bailey will speak at the US Federal Reserve’s central bank symposium in Jackson Hole, Wyoming on Friday, August 23. According to media reports, the Governor of the Bank of England will state that headline inflation has demonstrated the dynamic of a sharp decline in the context of the beneficial effects of such a factor as the decrease in food and energy prices. He is also expected to note the effectiveness of the monetary policy concept, which provides for high borrowing costs, in countering so-called second-round effects such as wage growth and price-setting.

Headline price growth in the United Kingdom has been at 2% for two months this year, which is in line with the Bank of England’s target. At the same time, in July, the corresponding figure was 2.2%.

According to preliminary expectations, during Friday’s speech in the United States, Andrew Bailey will make a statement that the risks of persistent inflation are currently lower compared to the situation a year ago.

Also, according to media reports, the head of the central bank of the United Kingdom will warn about adverse scenarios, the potential implementation of which will mean a longer compared to expectations continuation of restrictive monetary policy. The relevant scenarios envisage structural changes in the goods and labor markets with sensitive consequences for the supply side of the economy.

As we have reported earlier, Bank of England Governor Embraces AI.