BoE’s Bailey warns inflation risks tilted to the upside

Bank of England (BoE) Governor Andrew Bailey said that the central bank is “watching the extent of inflation pass-through,” while acknowledging that inflation risks are tilted to the upside, after the BoE raised interest rates to 4% on Thursday.

Bailey added that future decisions hinge on how fast inflation edges lower towards the BoE’s 2% inflation target. He said that a resolution of the US-Iran conflict “would bring limited relief from inflation.”

Key highlights:

The BoE is watching the extent of inflation pass-through.

Inflation risks are on the upside, which could change

The future decisions hinge on how fast inflation comes down.

Peace moves would bring limited relief from inflation

Inflation is baked in currently due to the energy price cap