Bailey Warns Interest Rate Hikes Loom as Oil Costs Persist

Bank of England Governor Andrew Bailey warned that it will become increasingly difficult to avoid raising interest rates as long as high oil and gas costs persist. Speaking on Friday, Bailey stated that the pass-through of energy price shocks has been 'quite subdued' so far.

However, he added that officials cannot wait for second-order inflation effects to emerge before taking action. The longer these costs remain high, the more pressure there will be to raise interest rates, according to Bailey.