Bank of England Policymaker Cautious on Interest Rate Hike

A Bank of England policymaker has downplayed the need for raising interest rates amid expectations of an upcoming hike.

Alan Taylor, a member of the Bank's Monetary Policy Committee (MPC), said that the case for further rate increases is 'not compelling' unless energy prices remain high for an extended period and generate clearer signs of a transmission into broader inflation persistence.

Taylor pointed out that higher energy costs are largely concentrated within the energy complex itself rather than spreading widely through the economy, echoing comments made by Bank Governor Andrew Bailey on Monday.

Bailey said there was 'no question we are seeing the direct effects of the energy shock' but that the pass-through to the wider economy is currently 'subdued', adding that it will get harder to maintain a stance of not increasing interest rates if energy prices remain higher.