Governor Andrew Bailey told the House of Lords’ Economic Affairs Committee that restoring inflation to the 2% target is essential for public confidence in monetary policy.
He dismissed proposals to raise the target to 3%.
UK CPI fell to 2.8% in April 2026; the Bank of England projects inflation near 4% by end‑2026 assuming gradual energy price declines.
In an adverse scenario with higher energy prices, inflation could exceed 6% in early 2027, still below the 11% peak recorded in October 2022.
