Bailey Says Markets Price In Inflation Risk Premium
Bailey said investors are pricing in three Bank of England rate hikes over the next 12 months as energy-driven inflation risks rise.
- On Tuesday, Bank of England Governor Andrew Bailey and Monetary Policy Committee members faced MPs at Parliament's Treasury Committee to discuss interest rates, inflation, and ongoing economic pressures in the UK.
- Global inflationary risks remain tilted to the upside, Bailey told the committee, as the continuing Middle East conflict threatens to drive energy prices higher and exacerbate financial market volatility.
- External MPC member Megan Greene, who voted for an increase last month, advocated for a "risk management strategy" to address "incredible uncertainty" regarding energy and commodity costs rather than waiting for conclusive evidence.
- Investors are currently pricing in three rate hikes over the next 12 months, though Bailey stressed that such increases remain dependent on future economic developments rather than being unconditional.
- The committee will meet next week to vote on whether to increase, hold, or reduce rates from the current 3.75% level amid persistent inflation and energy price risks.
14 Articles
14 Articles
Bank of England boss warns of 'upside inflation risks' in major interest rate update
The head of the Bank of England is sounding the alarm over the "upside" inflation risks facing the UK economy in the months ahead.Speaking before Parliament's Treasury Committee, the central bank's governor Andrew Bailey pushed back against suggestions that the central bank has a predetermined path for borrowing costs.Mr Bailey acknowledged that the balance of risks to inflation remains tilted to the upside, driven primarily by energy prices, bu…
The President of the Bank of England (BoE), Andrew Bailey, said on Tuesday (8) that he wants to dispel the idea that it is only a matter of time before the British central bank increases interest rates, rather than a possibility that depends on economic and geopolitical developments. Bailey stated that investors have predicted interest increases above what can only be explained by the most likely trajectory of BoE's policy, a risk award that ref…
Bailey warns on inflation risks as Iran war roils UK economy
Bank of England governor Andrew Bailey has warned inflationary pressures are still buffeting the UK economy and energy prices could rise further next year if the war in Iran continues. Speaking to MPs on Tuesday, the Bank chief said that the risks to inflation were “to the upside” and energy prices “could be higher still” [...]
Evening Standard
Bank has no ‘secret plan’ for unconditional interest rate hikes, says Bailey
Andrew Bailey, governor of the Bank of England, told MPs at Parliament’s Treasury Committee that there are still ‘upside’ risks to inflation.
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