No rush to increase UK interest rates, says Bank of England, Governor

The Bank of England Governor, Andrew Bailey, has advised that, due to the “very big energy shock” the economy is facing, they won’t be in a rush to increase UK interest rates.

During an interview with the BBC, Bailey said, “There are really difficult judgments to be made. We’re not going to rush judgments on those things”. He went on to say that there were suggestions that, before the conflict in Iran, the market was settling; however, the Bank of England was waiting for meaningful data to show how the conflict was impacting UK prices and growth.

The increase in oil and gas prices means slower economic growth and higher inflation, making it difficult for consumers due to higher production and transportation costs, raising prices for household budgets.
The Governor added that due to Britain’s reliance on gas, the impact could be significant, but this would depend on how long the conflict continued.

“The faster there is a resolution to this situation – I particularly mean in terms of the supply of energy coming out of the Gulf – the easier and better the outcome will be” – Bailey.

To summarise, with energy costs threatening a rise in inflation, the Bank of England will wait for significant data before a decision can be made ahead of their next policy committee meeting at the end of April.