Bank of England Governor Andrew Bailey indicated that a prolonged energy shock would increase the likelihood of an interest rate hike. Speaking on the 25th at a panel discussion at an event in Oxford co-hosted by the University of Oxford and the New York Fed, Bailey said the Bank of England has held its policy rate steady since the conflict in the Middle East began, but that the longer energy prices stay elevated, "the harder it will be to maintain that stance." He also noted that policymakers cannot wait for conclusive evidence of second-round effects before moving to raise rates, adding that "by the time that evidence arrives, it will already be too late."
Bailey says prolonged energy shock raises odds of a BoE rate hike, pushing UK gilt yields up
Bailey's hawkish hint that a prolonged energy shock could force a BoE rate hike strengthens sterling
