Bank of England Governor Bailey: Upside surprise in wage inflation suggests second-round effects will take longer to wear off.

Bank of England Governor Bailey: Wage growth is significantly stronger than in May.

Bailey, Governor of the Bank of England: When the CPI falls back to the expected range, it is likely to be lower than the target level.

The U.S. dollar index DXY fell 15 points in the short term and is now at 102.59.

UK 2-year government bond yields fell 11.80 basis points to last at 4.876%.

Bank of England Governor Bailey: Inflation risks remain tilted to the upside.

Bank of England Governor Bailey: Weak economic growth will help reduce inflation.

Andy Challenger, senior vice president of employment data company Challenger: As consumers continue to spend and inflation falls, the job market remains resilient amid rising interest rates. Companies tired of layoffs are finding other ways to cut costs. Many companies have slowed down their hiring, but wages continue to rise, especially for minimum wage earners.

UK 10-year gilt yields were unchanged on the day at 4.40%, reversing losses.

Bank of England Governor Bailey: But we should not read too much into it, because service price inflation reflects volatility factors.

Bank of England Governor Bailey: The news on service price inflation since May has not been pleasant.

Bank of England Governor Bailey: Commodity price inflation could fall faster.

Bank of England Governor Bailey: We expect food price inflation to come down gradually this year.

Bank of England Governor Bailey: Food and drink prices in the UK remain high.

Bank of England Governor Bailey: Food and drink inflation appears to have peaked.

Bank of England Governor Bailey: There is more uncertainty about non-energy inflation.

Bank of England Governor Bailey: The gradual pass-through of lower energy prices explains the difference between UK and Eurozone CPI.

Bank of England Governor Bailey: We expect inflation to fall to around 5% in October.