Bank of England's Pill warns of risk that high energy prices gradually build longer-term inflation pressures

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Bank of England Chief Economist Huw Pill has indicated there is a risk that the surge in energy prices stemming from the Iran conflict will gradually build longer-term inflation pressures in the UK. While noting it is welcome that the energy price spike has not yet significantly undermined public confidence in the 2% inflation target, he said it will not be possible to judge until later in the year whether a slower but more troublesome second-round effect is emerging, as firms and workers try to recoup inflation-related losses. Pill voted for a rate hike at the Bank of England meeting on the 30th, dissenting against the decision to hold rates steady.

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