Breeden Flags Energy Price Risks as Sterling Remains Under Pressure

Bank of England Deputy Governor Sarah Breeden sounded an alarm on energy prices, warning that it's not clear when they will fall. She noted that higher energy costs have so far had a limited indirect impact on UK inflation due to slack in the economy.

Breeden emphasized the importance of monitoring firms' pricing decisions and cited various surveys as key inputs for policymakers.

The BoE is closely watching global energy market volatility, which could lead to UK inflation pressures remaining elevated. This has implications for interest rates, with the bank potentially raising them to prevent deeper economic damage.