Bank of England Governor Andrew Bailey stated that while the impact of the energy-cost shock from the US-Iran war on broader UK inflation has been limited, it is becoming harder to avoid. He emphasized the need to monitor the pass-through into indirect and second-round effects on inflation. Bailey noted that although economic data has shown signs of improvement, the longer high oil and gas costs persist, the harder it becomes to resist pressure.
He refrained from commenting directly on imminent UK interest rate hikes, maintaining that the current framework remains unchanged. Regarding second-round effects from the energy shock, Bailey described the situation as "early days still." Markets are watching for further signals from the BOE as the energy crisis evolves.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing