Too cautious?: Andrew Bailey initially dismissed inflation as 'transitory' before embarking on a series of fourteen straight rate hikes
Bank of England Governor Andrew Bailey faces another test this week as new figures show inflation is under control.
Inflation is expected to fall to 4 percent by November.
This is down from a peak of 11.1 percent last fall after Russia's invasion of Ukraine.
The Bank decided last week to keep interest rates at a 15-year high of 5.25 percent and warned that borrowing costs will remain high “for an extended period” to curb price rises.
The financial markets disagree and expect four or five interest rate cuts next year, the first of which will take place as early as May.
Inflation has fallen sharply as economic growth has come to a standstill. It could reach the Bank's target rate of 2 percent within six months – a year earlier than Bailey predicts.
Bailey initially dismissed inflation as 'transitory', before launching a series of fourteen rate hikes in a row. Experts fear he will be slow to change course and that this could lead to a long-term slump.
Independent economist Julian Jessop said: 'The Bank currently lacks the confidence or credibility to cut rates until it is certain that inflation is back under control.'