Expectations for future wage growth remain at 5.2pc, which Mr Bailey has suggested is not consistent with the Bank’s inflation target.
However, there are also signs that the jobs market is loosening. Businesses are becoming more willing to let staff go “as they perceive it to be less difficult to recruit in the future”, the Bank said.
A Bank survey suggested that food price rises were likely to keep moderating, with large supermarkets now expecting food inflation to be “around 4pc by spring” and between 3pc and 4pc for the rest of 2024.
Non-food inflation was reported as “returning to normal”, while prices of some big ticket items like furniture have also started to fall. The Bank noted that there was a “growing sense that house prices have bottomed out and are now expected to stay flat or grow modestly over the next few months”.
However, its survey added that rental demand “remains strong”.
A separate survey on Thursday suggested Britain was already out of recession. S&P Global’s flash estimate of economic activity showed March is on track to be the fifth month of growth in a row.
However, the Bank warned that the contraction in the private sector at the end of last year was much deeper than headline figures suggested.
Stripping out public sector growth in health and education, the economy probably shrank by 0.4pc in the three months to the end of September and the following three months, the Bank said.
