BoE Governor Warns Interest Rates May Rise Amid High Energy Costs

Bank of England (BoE) Governor Andrew Bailey has signaled that interest rates may need to rise due to persistently high energy prices. This stance is a change from previous expectations, with Bailey saying that maintaining current interest rates would be difficult if energy prices remain high.

The BoE has not raised interest rates since the war began, but several officials have expressed concerns over higher energy costs resulting from the conflict. Bailey reiterated these concerns, stating that the longer energy prices remain high, 'the harder it will be for us to maintain that stance.'

The central bank is concerned about inflation, which has remained above 2% target for almost five years. Bailey said that monetary and financial conditions in the UK have tightened as the BoE maintained interest rates.