Breeden: Higher Rates Appropriate as Inflation Risks Rise

Bank of England Deputy Governor Sarah Breeden suggested that raising interest rates would become increasingly suitable to combat rising inflation risks. Speaking at a UK Macro Policy Forum event, she stated that policymakers should not delay in responding to elevated energy prices, as a delayed response could lead to regret.

Breeden's comments align with a recent change in tone on the Monetary Policy Committee, which may pave the way for a rate increase in November. This move would follow actions already taken by the European Central Bank and the U.S. Federal Reserve.

Regarding market pricing of interest rate increases, Breeden noted that her focus is on the next decision, scheduled for November. She emphasized that the central bank cannot disregard market pricing of rate hikes, which currently stands at around 100 basis points over the coming year.