Bank of England Governor Andrew Bailey said on Tuesday there was strong evidence that British inflation was falling, and that the question for BoE rate-setters remained how much more evidence was necessary before starting to cut interest rates.
"In the UK we're disinflating at what I call full employment. I see, you know, strong evidence now that that process is working its way through," Bailey said at an event organised by the International Monetary Fund in Washington.
"Our judgement with interest rates is 'how much do we need to see now to be confident of the (disinflation) process'," he added.
After the BoE's last rate-setting meeting in March, Bailey said inflation was "moving in the right direction" for a cut.
Economists polled by Reuters expect official data due at 0600 GMT on Wednesday to show that Britain's consumer price inflation dropped to 3.1% in March, down from February's 3.4% and a 41-year high of 11.1% in October 2022.
The BoE has forecast inflation will fall below its 2% target in the second quarter before rising back towards 3%.
Financial markets price in two rate cuts by the BoE this year, with a first move in August or September, a slightly earlier and faster pace of rate cuts than expected from the U.S. Federal Reserve.
IMF forecasts on Tuesday showed the body expected British inflation to average 2.5% this year and 2.0% in 2024, similar to the euro zone average and slightly lower than its 2.9% forecast for the United States this year.
Bailey said different inflation paths for the United States and Europe this year could lead to somewhat different paths for interest rates.
"The dynamics for inflation are rather different now, between Europe ... and the U.S. I think there's more demand-led inflation in the U.S. than we're seeing," he said.
