BoE Warns of Rising Energy Costs Threatening Inflation Targets

Bank of England Governor Andrew Bailey has warned that the central bank may struggle to keep inflation under control due to rising energy costs. The price of Brent crude oil is firmly above $100 a barrel, and gas costs are proving challenging for the UK economy.

These developments come on top of existing pressures from the unresolved Iran war, which are pushing up prices. Bailey's message after the July interest rate decision was clear: 'Please do not leave this room thinking that the BoE is edging toward a hike.'

With inflation running above the Bank of England's 2% target and new risks emerging, it may be difficult for the central bank to keep rates stable. Bailey may have trouble being as emphatic at the next interest rate decision on Thursday.