BoE's Taylor says There may be a small excess of inflation over target in 2026, but by late 2026 we are again very close to 2%

• If economy unfolds in line with forecasts, "I would expect Bank Rate...to be near neutral, say around 3% by the end of 2026, if inflation still sits a bit above  target."


• In the near term I see stronger disinflationary forces building up over the rest of this year, and then in the medium term I see a need to reach for a lower neutral level over the course of 2026 and 2027 should we be able to normalize smoothly


• "we remain restrictive such that for me a better risk management approach at this point is to cut and hold for longer later, rather than hold too much, and have to cut in a hurry later. I think of this as a form of insurance. "

04 Jul 2025 - 16:05- Fixed IncomeImportant- Source: BoE