The Bank of England expects a decline in inflation and demand.
A member of the Bank of England's Monetary Policy Committee stated that the bank will likely soon stop facing a trade-off between slowing growth and inflation. Economic indicators are weakening, inflation and wage growth are below expectations, and unemployment is higher than forecasted.
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Alan Taylor, a member of the Bank of England's Monetary Policy Committee, stated that in the near future, the central bank will likely no longer face the need to choose between slowing economic growth and dealing with inflationary pressures. However, he did note the risk of demand falling too sharply.
According to his assessment, economic indicators are showing signs of weakening. Throughout 2025 and into 2026, inflation has remained below the levels projected in previous Bank of England forecasts. At the same time, unemployment has been higher, while wage growth has fallen short of expectations.
Last month, Taylor was among four members of the Monetary Policy Committee who supported lowering the base interest rate from 3.75% to 3.5%. At that time, he pointed out the likelihood that inflation could consistently remain below the Bank of England's 2% target in the future.