Bank of England Governor Andrew Bailey has signaled that another interest-rate hike is likely if high energy costs persist. Speaking to Bloomberg TV after the central bank raised rates to 4% on Thursday, Bailey emphasized that a second hike is “probably more likely than not” under current conditions.
The warning comes amid rising inflation concerns, with Bailey noting that a jump in inflation is already “quite baked in at this point.” This assessment holds even if tensions in the Middle East deescalate rapidly, suggesting that the economic impact of recent events is already significant.
The central bank’s decision to raise rates to 4% reflects its efforts to combat inflationary pressures. Bailey’s remarks underscore the Bank of England’s cautious stance, as it monitors both domestic and geopolitical factors that could influence future monetary policy.