BoE’s Taylor: Will be close to CPI target sustainably

BoE’s Taylor: Will be close to CPI target sustainably

BoE’s Taylor: Inflation to Hit 2% Target Sustainably, Paving Way for Further Rate Cuts

Bank of England policymaker Alan Taylor stated on February 14, 2026, that inflation is likely to stabilize near the central bank’s 2% target in mid-2026, accelerating previous projections. This assessment, delivered in a speech at the National University of Singapore, underscores cooling wage growth and improving economic dynamics as key factors supporting a sustainable inflation decline.

Taylor’s outlook aligns with recent Monetary Policy Committee (MPC) actions. In December 2025, the BoE reduced its benchmark interest rate to 3.75% from 4%, with Taylor joining a five-member majority in favor of the cut. Four MPC members had advocated maintaining rates unchanged. The decision reflected easing inflationary pressures, as the UK’s inflation rate stood at 3.2% in the most recent data.

Governor Andrew Bailey has similarly signaled that inflation could reach 2% as early as April or May 2026. Market expectations now price in two additional 25-basis-point rate cuts by the BoE in 2026, assuming continued alignment between Taylor’s projections and incoming data.

Taylor also highlighted long-term global trade recovery as a structural benefit, noting that smoother international commerce—post-shocks like U.S. tariff policies—could further reduce inflationary pressures. He emphasized that such developments represent “positive supply shocks” for countries integrating into global markets.

The statements reinforce a consensus among BoE officials that monetary policy normalization is progressing, though risks remain balanced. With inflation nearing target and wage growth moderating, the path for lower borrowing costs appears increasingly entrenched, provided economic fundamentals hold steady.

Bank of England's Taylor says rates set to fall further as...: Yahoo Finance, January 14, 2026.