Bank of England Governor Andrew Bailey indicated that persistently high energy prices are making it increasingly difficult to justify keeping the bank rate unchanged. The Monetary Policy Committee remains divided, with three members having previously voted for a 4% rate increase. Market expectations now show an 80.5% probability of a 25 basis point hike in November, up from 70% prior to Bailey’s statements. This shift reflects a growing consensus that the central bank may need to act to counteract inflationary pressures stemming from energy costs. The Bank of England’s next decision in November will be pivotal in determining the institution’s response to ongoing inflationary pressures.
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