Mr Bailey on Thursday refused to be drawn on the timing of the first rate cut but did little to dampen expectations one was coming. Speaking to Sky News, he said: “The decision, unless the world changes, and of course unfortunately the world does change and particularly at the moment, the next decision is more likely to be when do we cut.”
It came as rate cut expectations in the US were pushed back on Friday after analysts were blindsided by much stronger employment figures than expected.
US non-farm employment soared by 353,000 in January, according to the US Bureau of Labor Statistics, nearly double the consensus forecast of 180,000, in a sign that high rates have not reined in growth and a big fall in borrowing costs would risk stoking inflation.
Matthew Ryan, head of market strategy and financial services firm Ebury, said: “Today’s payrolls report has all but completely eliminated any lingering possibility of a March interest rate cut from the Federal Reserve.”
The Fed voted to hold rates at 5.25pc to 5.5pc earlier this week, when it said it needed “greater confidence” that inflation is moving towards its target rate of 2pc.
James Knightley, chief international economist at ING, said the figures were a “blowout”.
He said: “January’s US employment report is crazy strong. The momentum in job creation is on the rise again, but this time, it isn’t merely the leisure & hospitality, government and education & healthcare services.”
