In an interview with the Financial Times, Governor Bailey stated that rate cuts were “in play” at future meetings of the BoE Monetary Policy Committee (MPC), amid signs that tighter policy has quelled the risk of a wage-price spiral.

“If the second-round effects don’t come through, that’s good because monetary policy has done its job”, Governor Bailey said, referring to the lack of persistent inflationary pressures.

Major central banks, including the Federal Reserve and European Central Bank, have also signalled interest rate cuts can be expected come summer.

Regarding the technical recession last year, Governor Bailey believes it points to signs of an upturn, saying it is “obviously good news” as the UK was “effectively disinflating at full employment”.

The Governor declined to specify the timing or magnitude of potential rate cuts this year but acknowledged: “The fact that we have a curve that has cuts in it for the year as a whole is not unreasonable to me.”