Bailey Cautious on Energy Prices, Bullish on Artificial Intelligence

BoE Governor Andrew Bailey spoke at the Monetary Economics Conference hosted by the University of Oxford on Friday. He stated that the pass-through from higher energy prices remains 'quite subdued' so far, but warned that a prolonged period of high energy prices could make it harder to maintain rates unchanged.

Bailey emphasized that the BoE takes into account the rise in mortgage rates when assessing economic and monetary conditions. Looking further ahead, he expressed a positive view on Artificial Intelligence (AI), saying it could provide a positive supply shock at a time when economies have been facing negative supply shocks.