Bank of England (BoE) Deputy Governor for Financial Stability Sarah Breeden stated at a panel discussion during European trading hours on Thursday that the monetary policy should remain steady until the United Kingdom (UK) central bank has sufficient information.
Remarks
Where we are now is very different to last energy shock in 2022.
Firms and workers are likely to have less price and wage bargaining power, so second round effects less likely.
Not wise to act before we have sufficient information.
Will know more on balance of risks and scale and duration of shock by April meeting.
Even with higher borrowing costs, do not expect a bust in borrowing as no boom before.
Market reaction
No immediate reaction on the Pound Sterling (GBP) is observed after BoE Breeden’s comments. As of writing, GBP/USD trades marginally lower around 1.3355