Bank chief Andrew Bailey: Inflation doesn't have to hit 2% for us to cut interest rates

BRITAIN'S "very small recession" may already be over because the economy is beginning to rebound, Andrew Bailey has said.

-  Martyn Brown

The Bank of England boss said there are "distinct signs of an upturn" as he signalled better times ahead.

And he raised hopes that interest rates could be slashed sooner than expected in a much needed boost for mortgage-payers.

Mr Bailey said the Bank could start making cuts before inflation reaches its 2% target.

Inflation is at 4% and is forecast to plunge throughout the spring.

The governor told MPs there are "encouraging signs" that the rate of price rises is falling in all areas, which could pave the way for interest rates to be cut from 5.25%.

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