have voted to maintain bank rates at 5.25%. monetary policy remains restrictive. let me be clear, there is absolutely no room for complacency. inflation is still too high. we will keep interest rates high. we will keep interest rates high enough for long enough to make sure we get inflation all the way back to the 2% target. we will be watching closely to see if further increases are needed but even if they are not it is much too early to think about rate cuts. i'm going to talk about inflation over the coming months and that i will turn to the outlook for the economy further ahead. and means for monetary policy. to start with the near—term outlook for inflation. chart one from the report shows consumer price inflation and its components since 2019. it shows how inflation has continued to fall since the previous report in august. watch as we expected. inflation took a step down in the data forjuly published two weeks after the august report. as you can see in our near—term petition shown in the shaded area, we expect inflation to take another, larger step—down in october's data, when it is published in two time. from 6.7% in september we think it will probably fall to just below 5%. within expected to remain around that level for the rest of the year. —— but we then expected. the dark orange bars show this fall is driven in large part by energy prices were gradually falling inflation for food and other goods will help too. as shown by the narrowing purple and blue bars. ofgem's a price cap means we can be confident about the contribution from household energy bills to lower inflation over the coming months. but any projection is uncertain. there are upside risks to inflation from energy prices following the tragic events in the middle east. and there remains uncertainty about the time it will take other non—energy components of inflation to come down as well. chart two shows the evolution of our near—term inflation projections and compares them with the out—turn is of the data. the blue line is actual inflation, the stalks are the near—term forecasts from successive monetary policy reports in different colours from november last year. as you can see, the data has come in line our near—term projections over the last year. in the past few months inflation out—turn suck in the past few months inflation out—turn succumb in somewhat lower than we expected. we now protect inflation to be a little lower over the remainder of the year than we did in august. most of the downside nuisances orchestra fights lower core price inflation per division has come down a little fatter than we expected. while services inflation is also slightly lower than we expected in august, it remains elevated and it now contributes more to overall inflation than the prices of energy, food and other goods. it's important that services inflation fall steadily over the next year, to achieve that we need to see an easing of underlying cost pressures in the economy. so this brings me to the medium—term outlook. in the face of the series of significant economic shocks that have hit us in recent years, overall demand in the economy has proved resilient, supported by a very tight labour market. but there are increasing signs that higher interest rates are weighing on economic activity and we see that in weaker official activity data in a range of business surveys. as we described in some detail in today's report, the monetary policy committee always takes a collective steer from a wide range of indicators to inform its view of labour market developments. the overall message from these indicators is that while it remains tight in a historical context of the labour market has loosened and by little more than projected in august. chart three shows how most indicators of up and growth are now easing. this includes the purchasing managers index for composite employment intentions, the permanent staff placement index which is in dark orange. the official measure in purple is all weakening. but this last series can be volatile and there are increased uncertainty surrounded following the suspension of the labour force survey. to inform the assessment, bank staff feed all these indicators into a model to estimate a measure of underlying employment growth. this is a long—standing practice but the challenges with the official data reaffirmed the importance of taking such steers from quite a wide range of data sources. the model —based estimate has shown in chart four in blue. the official data is in orange. as you can see, the estimated measure of employment growth has gradually slowed since 2021. the indicator —based model suggests implement will be broadly flat over the second half of this year. there are other signs the labour market is listening, the number of vacancies is falling and unemployment has gone up. despite the suffering in the labour market, nominal wage growth remains much higher than would be consistent with the inflation target if sustained at these rates. the ons measure of annual growth in regular average weekly earnings in the private sector was 8.0% in august. higher—than—expected. the continued strength in which growth has persuaded the mpc to raise a slightly its assessment of the medium—term equilibria rate of an apartment and its estimate of persistence in wage and price inflation. in effect the mpcjudges that the weakening in the labour market has been driven in part by a lower supply of labour, notjust lower supply of labour, not just demand. lower supply of labour, notjust demand. this would help to explain the continued strength in pay growth even as employment growth has eased. while all measures of current pay growth remain elevated, the recent pick—up in the official measure of private sector wages has not been matched by other indicators. this is illustrated in chart five. theindeed the indeed which struck in purple points to which growth goes to 7%. below the official data in blue. the bank's agents continue to report the average annual pay settlements have beenin average annual pay settlements have been in the region of 6% to 6.5%. that is by the mpc will continue to monitor all available data on pay growth very carefully. we could demand a labour market are signs that monetary policy is restrictive. —— weaker demand. the effect of higher interest rates continue to weigh on economic activity throughout the focus represented today. chart six shows the mpc plasma projection for growth in the uk economy conditional on market interest rates. gdp is projected to remain broadly flat through 2024 stop growth and recovers the second half of the forecast period. but it remains below historical averages. reflecting both restrictive monetary policy and subdued potential supply growth. 0n growth. on balance, the budget of excess demand is diminished over recent quarters. we increase our increase increase —— are we expect increased slack from next. this will reduce pressures on the economy alongside external cost pressures. chart seven shows the implications for consumer price inflation. in the central projection, which is conditional on the market path of interest rates, inflation is more likely to end below the 2% target than above it. albeit only slightly. in the model almost like a case, inflation is 1.9% in two years' time, then focused at 1.5% in the fourth quarter of 2026. the committee continues tojudge, however, the risks around that central case how skewed towards higher inflation. adjusting the modal projection for the balance of risk, the mean expected path for inflation is just above the 2% target in two years' time are just below it towards the end of the three year forecast period. the mpc�*s alternative production content shouldn't honour of the far rate at 5.25% has cpi inflation somewhat lower than the conditional on the market path, especially towards the end of the forecast period. in the mean forecast, inflation is expected to be right at the 2% target in two years' time rather than slightly above it. it then falling to 1.6% rather than 1.9% at the end of the forecast period. this is because the market path begins to decline gradually from the current level of bank rate towards the end of next year, so the constant path is above the market path in the final two years of the forecast. monetary policy is currently restrictive in the sense that if we maintain this stance for long enough we will squeeze inflation out of the system. that's what we will do. it also means being on watch forfurther what we will do. it also means being on watch for further signs of inflation persistent that may require rates to rise again. but we should not keep monetary policy restrictive for excessively long. we have to be mindful of the balance of risk of —— between doing too little and doing too much. how long a restrictive stance will be needed will ultimately depend on what the incoming data tell us about the outlook for inflation over the medium term. the mpc�*s latest projections indicate monetary policy is likely to need to be restrictive for quite some time yet. on returning fish to the 2% target remains an absolute priority. with that, we will be happy to take questions. that, we will be happy to take questione— that, we will be happy to take cuestions. ,, , questions. usual process, please, one question _ questions. usual process, please, one question each _ questions. usual process, please, one question each and _ questions. usual process, please, one question each and let - questions. usual process, please, one question each and let me - questions. usual process, please, | one question each and let me know where _ one question each and let me know where you're from when you get the microphone. we will start with faisai— microphone. we will start with faisal and _ microphone. we will start with faisal and then go to sam. puzzle islam, bbc's. you are just about_ puzzle islam, bbc's. you are just about not— puzzle islam, bbc's. you are just about not predicting _ puzzle islam, bbc's. you are just about not predicting a _ puzzle islam, bbc's. you are just about not predicting a recession. puzzle islam, bbc's. you are just i about not predicting a recession but stagnation — about not predicting a recession but stagnation for — about not predicting a recession but stagnation for a _ about not predicting a recession but stagnation for a year, _ about not predicting a recession but stagnation for a year, year - about not predicting a recession but stagnation for a year, year and - about not predicting a recession but stagnation for a year, year and a . stagnation for a year, year and a half or— stagnation for a year, year and a half or so— stagnation for a year, year and a half or so if— stagnation for a year, year and a half or so if there _ stagnation for a year, year and a half or so if there was _ stagnation for a year, year and a half or so if there was a - stagnation for a year, year and a | half or so if there was a recession would _ half or so if there was a recession would it— half or so if there was a recession would it change _ half or so if there was a recession would it change your _ half or so if there was a recession would it change your view - half or so if there was a recession would it change your view that. half or so if there was a recession . would it change your view that rates should _ would it change your view that rates should stay— would it change your view that rates should stay roughly _ would it change your view that rates should stay roughly where - would it change your view that rates should stay roughly where they- would it change your view that rates| should stay roughly where they are? i should stay roughly where they are? i must _ should stay roughly where they are? i must be _ should stay roughly where they are? i must be very— should stay roughly where they are? i must be very clear, _ should stay roughly where they are? i must be very clear, our— should stay roughly where they are? i must be very clear, our objective . i must be very clear, our objective is price stability and that is defined as the inflation target so thatis defined as the inflation target so that is our objective. we don't set out to project growth one way or the other. you are right that it is subdued. we see the evidence that monetary policy and the rate rises we have done are now having an effect, they are restrictive and we think that is coming through in the profile of growth. and we are still at 6.7% in terms of inflation, so there is a considerable way to go. we are determined to take it all the way back to target, there must be no doubt about that. so that is what conditions there are for growth. do you want to come in? i conditions there are for growth. do you want to come in?— conditions there are for growth. do you want to come in? i think having this very rigid _ you want to come in? i think having this very rigid definition _ you want to come in? i think having this very rigid definition of- you want to come in? i think having this very rigid definition of what - this very rigid definition of what is a recession and what isn't is a bit odd. a continuum of outcome, whether or not it happens to be fractionally negative are fractionally negative are fractionally positive will not have a bearing on monetary policy. as andrew says, our focus a bearing on monetary policy. as andrew says, ourfocus is inflation. the outcome for growth might have some impact on that but i think it's not as if zero is some crucial threshold. obviously you are at pains to stress the continued — obviously you are at pains to stress the continued willingness _ obviously you are at pains to stress the continued willingness of - obviously you are at pains to stress the continued willingness of the - obviously you are at pains to stress. the continued willingness of the mpc to lift rates _ the continued willingness of the mpc to lift rates again _ the continued willingness of the mpc to lift rates again but _ the continued willingness of the mpc to lift rates again but it _ the continued willingness of the mpc to lift rates again but it seems- to lift rates again but it seems jarring — to lift rates again but it seems jarring when _ to lift rates again but it seems jarring when set _ to lift rates again but it seems jarring when set against - to lift rates again but it seems jarring when set against the l jarring when set against the increasingly _ jarring when set against the increasingly downbeat - jarring when set against the . increasingly downbeat outlook jarring when set against the - increasingly downbeat outlook for economic — increasingly downbeat outlook for economic activity, _ increasingly downbeat outlook for economic activity, softening - increasingly downbeat outlook for. economic activity, softening labour market _ economic activity, softening labour market and — economic activity, softening labour market and increasing _ economic activity, softening labour market and increasing slack- economic activity, softening labour market and increasing slack in - economic activity, softening labour market and increasing slack in thel market and increasing slack in the new year — market and increasing slack in the new year. there's _ market and increasing slack in the new year. there's not _ market and increasing slack in the new year. there's not much - market and increasing slack in thej new year. there's not much more likely— new year. there's not much more likely that — new year. there's not much more likely that the _ new year. there's not much more likely that the next _ new year. there's not much more likely that the next move - new year. there's not much more likely that the next move will- new year. there's not much more likely that the next move will be l likely that the next move will be down _ likely that the next move will be down rather _ likely that the next move will be down rather than _ likely that the next move will be down rather than up, _ likely that the next move will be down rather than up, what - likely that the next move will be down rather than up, what kindl likely that the next move will be i down rather than up, what kind of conditions — down rather than up, what kind of conditions would _ down rather than up, what kind of conditions would need _ down rather than up, what kind of conditions would need to - down rather than up, what kind of conditions would need to see - conditions would need to see specifically— conditions would need to see specifically in— conditions would need to see specifically in order- conditions would need to see specifically in order to - conditions would need to see specifically in order to meritl conditions would need to see | specifically in order to merit a downward _ specifically in order to merit a downward move _ specifically in order to merit a downward move in— specifically in order to merit a downward move in interest i specifically in order to merit a - downward move in interest rates? we have downward move in interest rates? have actually come as we have set out in the bar, assessed the risk to inflation remains in our view on the upside, so in a sense that conditioned our view of the path of rights. i think there are a number of things that underlie that judgment on the risk although we take it at the top down level, we don't build it up from below. are we to focus quite a lot on what the story is a lie that and i would point to two, one of which is continuing, which is tightness of the labour market, the evidence we see on pay, the evidence as you saw the charter and services inflation, these are the indicators we've been point do for some time and although i did point to some of the puzzle surrounded by data i was still so much of a number you take from that roar, it's still inconsistent with meeting the inflation target. the second thing i would say, i really have to say that obviously the events in the middle east are tragic in terms of the human cost. we have to view it through the economic lens, it does create uncertainty, it does create risk of higher energy prices. so far i would say that hasn't happened and that is always encouraging but the risk remains. in terms of your second part of your question on what it takes, i would point to get to the message i made a number of times, it's a very important one, which is we have got to see inflation coming down to target, no question. we have made very good progress. as i pointed out, i think it was quite a bit more to come this year but we have to see it go back down towards 2%. if i could make one point to add to that, io could make one point to add to that, go track— could make one point to add to that, go back to _ could make one point to add to that, go back to the first chart that andrew— go back to the first chart that andrew put the contributions to inflation. — andrew put the contributions to inflation, you can see now that the major— inflation, you can see now that the major contribution to inflation now and in _ major contribution to inflation now and in the — major contribution to inflation now and in the coming months is from services _ and in the coming months is from services inflation, and that reinforces our concerns around the persistence — reinforces our concerns around the persistence of inflation, we do think— persistence of inflation, we do think that _ persistence of inflation, we do think that will start to come off next _ think that will start to come off next year. _ think that will start to come off next year, but that has been a very sticky— next year, but that has been a very sticky element in inflation through this year — sticky element in inflation through this year. hints of where our bias still lies— this year. hints of where our bias still lies in— this yea