BoE Deputy Governor Discusses Energy Price Risk to Interest Rate Policy
- Reports
- 15
- Developments
- 1
- Repetition
- 93%
New informationRepeats or wire copies
What happened
Clare Lombardelli, a Deputy Governor at the Bank of England, spoke in Warsaw regarding the likelihood of interest rate rises. Lombardelli stated that policy is increasingly likely to tighten if elevated energy prices persist, absent clear evidence of disinflation or weaker economic activity. She noted that inflation had risen to a five-month high of 3.1% last month, moving further from the Bank’s 2% target rate.
From oxfordmail.co.uk
Why it matters
The comments underscore the central bank's dependence on energy price stability when setting monetary policy. Lombardelli cautioned that the interaction between the underlying economy, higher energy prices, and their transmission is the key factor determining if the Bank rate needs to rise.
From oxfordmail.co.uk
Who's involved
- Clare LombardelliBritish economist and Deputy Governor at the Bank of England
- Bank of EnglandCentral bank of the United Kingdom
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- OfgemSpeculative
The company might face operational impacts due to the announced 4% rise in the energy price cap.
- Lloyds Banking GroupSpeculative
The financial institution could experience increased funding costs and tighter lending standards due to predicted policy tightening.
- AsdaSpeculative
The supermarket chain could see increased input costs due to filtering higher energy costs.
- HM TreasurySpeculative
The government agency might need to review and tighten fiscal policy due to persistent energy price shocks.
Keep exploring
The entities involved
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Clare Lombardelli
British economist. Chief Economic Advisor and Director General Economics, HM Treasury, since 2018; Joint Head, Government Economic Service, since 2018
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Bank of England
central bank of the United Kingdom