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Newsflash: The governor of the Bank of England has predicted that interest rates will fall “gradually”.

In an interview with KentOnline, just published, Andrew Bailey said that “inflation has come down a long way” – it was 2.2% in August, just above the BoE’s target, having fallen from over 11% in autumn 2022.

“We still have to get it sustainably at the target and we have quite an unbalanced mix of components of inflation at the moment. But I’m very encouraged that the path is downwards therefore I do think the path for interest rates will be downwards, gradually.”

“Where it will settle is a good question. Simple answer is I can’t tell you with any great accuracy. What I would say is ‘will we go back to the very low near zero interest rates that we had until not that long ago’?

“My answer is I would not expect that because what caused interest rates to go that way it was, amongst other things, two very big shocks to the economy.