We had substantial disinflation until recentlyWe expect inflation to increase slightly further, but that will then be the peakWe have seen labour market continue to loosen, wage growth normalisingServices ex rents is stuck at close to 5%We should see services inflation fall materiallyImportant to note salience of food prices for household inflation expectationsHousehold inflation expectations appear to be more sensitive to food prices since 2022I do remain confident we will get inflation back to target with current restrictive rates, and market expectationsWage settlements are in line with pay surveysWage growth heading for target-consistent ratesI have been surprised by how long it has taken for wage-setting behaviour to get back in lineThe risk to inflation outlook balancedCannot rule out that there are some structural problems in the labour marketA gradual and careful approach on rates aptI see scope for further removal of policy restraint
I’ve heard them saying about services inflation falling materially for quite some time and yet here we are stuck at 5% for almost over a year. Based on his comments, I feel he’s more of a neutral/dove member at the moment.
Dhingra and Taylor are the most dovish BoE members at the moment but I would put Ramsden with them as well. He’s placing more weight on the labour market than inflation, despite everything going wrong on the inflation side.