BoE's Bailey sees more signs of softening labour market

(Reuters) -Bank of England Governor Andrew Bailey said on Tuesday there were now signs that Britain's labour market was softening and he repeated his view that interest rates are likely to continue falling.

"We are starting to see softening of the labour market ... pay increases are still well above a level consistent with the target. However, ... they are coming off," Bailey told the House of Lords' Economic Affairs Committee.

Earlier on Tuesday, Deputy Governor Dave Ramsden struck a firmer line on the labour market, saying there were clear signs of weakening and that he was now more worried that inflation could fall below the central bank's forecasts.

Bailey described the level of interest rates as restrictive, adding that he would give no steer on the outcome of the next policy decision in August.

"In these circumstances we are particularly careful about what we say on that front because the world is just so uncertain," Bailey said.

The BoE left interest rates on hold at 4.25% this month, although three of the nine members of the Monetary Policy Committee - including Ramsden - voted to cut interest rates.

(Reporting by William Schomberg, Suban Abdulla and Muvija M., writing by Andy Bruce; editing by William James)