LONDON (Reuters) -Bank of England Governor Andrew Bailey said in an interview published on Monday that inflation was slowing and an expected pick-up in price growth later this year was unlikely to embed longer-term inflation pressures in the economy.

Part of the forecast increase in inflation was due to regulated price increases - for items such as domestic energy and water - while the sluggish state of the economy was also likely to act against inflation, Bailey told regional business news website BusinessLive on a visit to south Wales.

"The context is not really supporting the view that we will get more persistence, so we looked through that," he was quoted as saying, adding that recent data showing the economy grew by 0.1% in the fourth quarter did not change the big picture.

Earlier this month, the BoE cut its benchmark interest rate to 4.5% from 4.75% as it halved its forecast for economic growth in 2025 to 0.75%.

But it also said inflation was likely to hit 3.7% later this year, almost double the BoE's 2% target, prompting the central bank to add the word "careful" to its message about a likely "gradual" further reduction in borrowing costs.

"We still see the gradual disinflation going on. The after-effects of what happened two or three years ago are wearing off, but it is a gradual process," Bailey told BusinessLive. "And careful was really because the risks are two-sided for me."

He repeated his view that U.S. trade tariffs could either push up or lower inflation in Britain depending on their impact on the world economy.

Bailey said he was encouraged by Federal Reserve Chair Jerome Powell saying he expected the United States to implement the so-called Basel 3.1 rules on bank capital.

In January, the BoE delayed implementing the rules in Britain by a year to January 2027 to get clarity on what the United States will do under Donald Trump as president.

(Reporting by Andy Bruce;Writing by William Schomberg; Editing by David Milliken)