“You can’t wait too long”: BoE’s Breeden warns on rate hikes amid energy shock
Bank of England (BoE) Deputy Governor Sarah Breeden said on Thursday that it is “not at all obvious” that there is a path toward lower energy prices, according to Reuters.
Bank of England Deputy Governor Sarah Breeden cautioned on Thursday that it is not at all evident a route to lower energy prices exists, according to Reuters. She pointed out that indirect pass-through effects from escalated energy prices have thus far been restrained, potentially due to slack within the United Kingdom economy. However, Breeden warned that the greater and protracted the energy crisis persists, the more probable it becomes that monetary policy will need to act.
The BoE policymaker added that the balance of risks has shifted, making a response from the central bank increasingly likely if those risks materialize. She also cautioned that policymakers cannot afford to wait too long for definitive proof of second-round effects on prices.
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