The Bank of England is playing the 'expectation management' game skillfully; while publicly dismissing rate cut expectations, in reality, they are giving the market a warning, and their desire for a soft landing can no longer be hidden.

The Bank of England Governor Bailey stated that to support the weak real economy, if a second-round price effect does not occur, they may tolerate inflation temporarily above the 2% target level; but he emphasized that once a second-round effect appears, tolerance will decrease. Bailey also said that the central bank has tightened the monetary environment by erasing market expectations of interest rate cuts and has impacted the economy.