SINTRA, (Portugal): The Bank of England will not necessarily have to act “forcefully” to get inflation under control, Bank of England Governor Andrew Bailey said on Wednesday, adding there were signs of an economic slowdown taking hold in Britain.

Earlier this month the BoE said it was ready to act forcefully if needed to tackle inflation that it expects to exceed 11% in October.

Financial markets have priced in an 80% chance that the BoE will raise rates by half a percentage point at its next meeting in August - a rarity for the British central bank, which last raised rates that much in 1995.

Bailey, speaking at a European Central Bank event in Portugal, said the BoE had not committed to specific action.

“There will be circumstances in which we will have to do more. We’re not there yet in terms of the next meeting. We’re still a month away, but that’s on the table,” he said.

“But you shouldn’t assume its the only thing on the table, that’s the key point,” he added.

The British central bank has forecast a weak outlook for demand and Bailey said it was now “very clear” that Britain’s economy was at a turning point and starting to slow. He also said Britain’s latest inflation data showed price growth was shifting away from goods and into energy and food prices, something the BoE would watch “very, very carefully”.

Bailey used his appearance on the ECB panel to claim some vindication for comments he made earlier this year about the need for restraint in pay deals in the face of risks that high inflation could become embedded in the economy.

Bailey was rebuffed for his comments in February by the spokesperson of Prime Minister Boris Johnson.

“I would note that rather more people seem to be agreeing with me today than were doing several months ago,” Bailey said, adding the dangers of second-round effects that prolong high inflation remained as stark as they were earlier this year.