Bank of England Monetary Policy Reports

Good morning. I would like to thank the Peterson Institute for International Economics for the kind invitation to speak with you today. I am especially looking forward to an engaging discussion with Esther George. I have long admired her exemplary service to the nation as president and CEO of the Federal Reserve Bank of Kansas City. She set a high bar for every Fed official. Before taking Esther’s questions, I would like to begin by offering a few observations about economic conditions and monetary policy. These are my personal views and not necessarily those of other FOMC participants. Economic Outlook and Balance of Risks The pace of economic activity picked up in the second quarter, propelled by higher consumer spending and solid growth in business fixed investment. Real GDP grew at an annual rate of 1.4% in the first half of 2025, which is somewhat below estimates of long-run potential.1 I expect output growth at a similar rate in the second half of 2025, before it returns to potential in 2026 or sooner. The policy uncertainty that has held back business and household spending continues to lift, and I expect some stimulus to growth from fiscal policy. Financial condition Fed’s Musalem: Expects Inflation To Ebb Back To 2% By Second Half Of 2026 - Tariffs Will Work Through Economy Over Two To Three Quarters - Expects Tariff Inflation Impact To Fade Eventually - Expects Job Market Cooling With Downside Risks To Labor Sector Fed’s Musalem: US Central Bank's Current Restrictive Monetary Policy In Right Place Given Data - Fed Needs To Balance Inflation, Job Goals Going Forward - There’s A Risk Tariffs Could Cause Persistent Inflation Rise Fed’s Musalem: Sees Job Market Holding Near Full Employment - Sees Modest GDP Growth This Year Before Returning To Trend In 2026 - Uncertainty Lifting For Economy, Fiscal Policy May Add Stimulus - Job Market Break-Even Level Between 30,000 And 80,000 Jobs Per Month

Fed's Waller: i've been clear i think we should cut at the next meeting. Fed's Waller: 10-year treasury yield has been kind of anchored - CNBC Interview. Fed’s Waller: Don’t Need To Go In Lick-Sequence Of Rate Cuts – CNBC - Could See Multiple Cuts, Whether It's Every Meeting Or Every Other Will Need To See What Data Says - I See Multiple Cuts Over Next Few Months Fed’s Waller: Inflation Expectations Are Anchored - We Know We'll Have A Blip Of Inflation But It Won't Be Permanent, 6 Months Out Will Be Closer To 2% - Tariffs Aren’t Going To Cause Long-Run Inflation - We Can Always Adjust Rate Cut Pace Fed's Waller: I have not had interview for fed chair job and don't have an interview scheduled at this point.

BoE's Lombardelli: I am not confident that there is currently a margin of slack in the economy. BoE's Lombardelli: I am less confident that the current policy stance, as embodied in the market curve, continues to be meaningfully restrictive. BoE's Lombardelli: Not predicting that we are already at neutral, but nor am I confident that if we reduce restrictiveness much further we will still be sufficiently restrictive to return inflation to target sustainably. BoE's Lombardelli: I judge that we should retain the space to cut further in the future if needed. If we cut too far or too fast, we may then have to change policy direction. BOE's Lombardelli Says Rate Hold Due to Concerns Over Persistent and Expected High Inflation and Supply-Demand Balance

UK Economy Approaching Soft Landing but Still in Fragile State, Says BOE's Taylor BoE's Taylor: My main concern has been to get inflation sustainably back to the 2% target, maintaining monetary policy restrictiveness as long as necessary, but no longer - Annual Report. BoE's Taylor: Upside risk to inflation is smaller. BoE's Taylor: Greater danger is inflation undershooting goal.

BANK OF ENGLAND'S BAILEY: SITUATION WITH FED IS SERIOUS, I AM VERY CONCERNED BoE Gov. Bailey: Stability underpins the foundations of policy.