WASHINGTON, April 17 (Reuters) - British inflation is broadly declining in line with the Bank of England's forecasts, and next month's numbers look on track for a sharp drop towards the central bank's 2% target, Governor Andrew Bailey said on Wednesday.
"We're actually pretty much on track for where we thought we would be," Bailey said at an event in Washington hosted by the Institute of International Finance.
"I expect that next month's number will show quite a strong drop," he added.
Official figures earlier on Wednesday showed annual consumer price inflation fell to 3.2% in March from 3.4% in February, a slightly smaller decline than the drop to 3.1% which was the median forecast in a Reuters poll of economists.
Last month the BoE said it expected inflation to fall below its 2% target in the second quarter of this year, due largely to a scheduled fall in regulated energy tariffs.
But it has forecast that inflation will rise back towards 3% later in the year due to continued strong wage growth and services price inflation.
After the BoE's last interest rate-setting meeting in March, Bailey said inflation was "moving in the right direction" for a cut.
Financial markets slightly scaled back their expectations for BoE rate cuts after Wednesday's inflation data, and now have only one quarter-point rate cut fully priced in for this year, most likely in August or September. (Reporting by Pete Schroeder, writing by David Milliken; editing by William James)
