Bank of England Committee member Taylor expresses concern about the inflation rate in the service sector

2026-02-23 21:52:26

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Investing.com - Bank of England Monetary Policy Committee member Allen Taylor expressed concerns about the pace of service sector inflation at a Deutsche Bank event on Monday, noting that the decline in this indicator over recent months has not been as rapid as expected.

Considered a more dovish member of the Monetary Policy Committee, Taylor stated that the consumer price index for services has not fallen significantly or quickly as anticipated. He expects the indicator to return to normal as wage growth slows.

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According to the latest data, service sector inflation slowed from 4.5% previously in January to 4.4%. The figure remains high and has been a primary focus for the Bank of England during its rate-cutting cycle.

Taylor said that inflation will sustainably approach the 2% target. He pointed out that the labor market is weakening in line with more pessimistic forecasts.

Latest data shows wage growth has slowed to 4.2%, still above the level policymakers consider consistent with a sustained return of inflation to target.

Taylor stated that he now sees a risk of inflation falling below the target. He added that the failure to improve productivity would pose another risk to the Bank of England’s forecasts.

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