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Skip to content All News Sport Culture Lifestyle Bank of England Governor Andrew Bailey has warned that prolonged high energy prices will make it increasingly difficult to keep interest rates at their current level of 3.75% and avoid a future hike. His comments follow statements from deputy governor Clare Lombardelli, who noted that monetary policy is 'increasingly likely' to tighten if elevated energy prices driven by Middle East conflicts persist. Mr Bailey was previously part of the 6-3 majority that voted to hold interest rates, but he highlighted that while pass-through effects are currently subdued, prolonged energy shocks present significant risks.
Inflation is forecasted by the Bank to climb to roughly 3.7% in the fourth quarter of this year and 4.2% in the first quarter of 2027, amplified by an upcoming 4% increase in the household energy price cap. Economists broadly expect the central bank to raise interest rates later this year in an effort to curb rising inflationary pressures and return to its official 2% target. In full High energy prices will make it ‘harder’ to avoid interest rate hike – Bailey More bulletins Thank you for registering Please refresh the page or navigate to another page on the site to be automatically logged in Please refresh your browser to be logged in
Source: The Independent
