June 24 (Reuters) - Bank of England Governor Andrew Bailey said on Tuesday that central bank reserves in the financial system could reach the top end of estimates from banks for their neutral level during the second half of 2026.

The BoE is moving from a system of abundant liquidity provided through years of quantitative easing to a demand-led system, where the level of reserves is determined by banks' needs - likely within what the BoE calls a "preferred minimum range of reserves".

Sign up here.

"The range (of forecasts from banks) has an upper end of somewhere around about 550 billion (pounds), so if that's ... right, then we'll get there in the second half of next year," Bailey told the House of Lords' Economic Affairs Committee.

https://www.reuters.com/world/uk/boes-bailey-sees-more-signs-softening-labour-market-2025-06-24/