[Bank of England Governor Bailey Downplays Second-Round Inflation Effects, Agrees with Waller's Views on Forward Guidance] As the Bank of England prepares to make its next interest rate decision on September 17, Governor Andrew Bailey reiterated in an interview that the UK has not yet experienced significant second-round inflation effects. "We are seeing relatively moderate second-round effects, and I think we have already observed some weakening in the labor market over a period of time," Bailey said at the Federal Reserve's Jackson Hole Economic Symposium. "My view is that, for now, we can continue to monitor the situation." This marks Bailey's first public comment on monetary policy since July 30. At that time, the Bank of England voted 6-3 to keep interest rates unchanged, with Bailey being one of the members voting in favor. During the press conference following that meeting, Bailey stated, "Please do not leave this room thinking the Bank of England is on a steady path toward raising interest rates." However, traders have since increased their bets on rate hikes. The market has now fully priced in a 25-basis-point rate hike this year, as well as another 25-basis-point hike by next spring. Meanwhile, short-term UK government bonds have underperformed their U.S. counterparts. (Cailian Press)