BoE Governor Bailey Comments on Inflation, Second-Round Effects, and Energy Shocks
| Pair | Now | Since publish |
|---|---|---|
| GBPUSD | — | — |
| EURGBP | — | — |
- BoE Governor Bailey sees UK second-round inflation effects as subdued.
- Middle East energy shocks delay 2% inflation target, push rate cuts off table.
- Comments temper November hike bets, but future decisions remain uncertain.
Bank of England (BoE) Governor Andrew Bailey stated on Friday that while UK inflation remains “enormously frustrating,” it is “too early” to definitively assess the strength of second-round effects, which so far appear “subdued.” Speaking in Bangkok, Bailey noted the UK economy has shown more resilience than anticipated, though not as strong as desired. He highlighted that Middle East energy shocks have delayed the 2% inflation target and effectively tightened financial conditions without direct rate increases, pushing rate cuts “off the table.” These remarks, considered more balanced than previous warnings, could temper expectations for a November rate hike, though Bailey cautioned against inferring the central bank’s next move. Upcoming catalysts include September inflation data and the October 28 Budget.