Bank of England Governor Andrew Bailey has raised concerns about intensifying inflation risks if elevated energy prices persist. The Bank decided to maintain its key rate at 3.75%, while UK CPI inflation currently stands at 3.1%, above the 2% target. While the pass-through of energy costs to broader inflation and wages remains limited for now, prolonged high prices could exert upward pressure on inflation expectations and wage-setting. Market participants assign a low probability to a rate cut in November, reflecting a cautious approach.
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