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Bank of England rate setters warn of 'sparks in the tinderbox'
Two deputy governors said they are closer to backing a rate increase as investors price a 75% chance of a November move.
- Two senior Bank of England rate-setters suggested on Thursday they are nearing a vote to increase borrowing costs, as persistent energy costs raise inflation risks.
- Deputy Governors Clare Lombardelli and Sarah Breeden voted to hold the benchmark rate at 3.75% last week but now signal they are considering shifting their position on future hikes.
- Lombardelli warned in Warsaw that higher energy prices risk triggering indirect effects on wage bargaining, while Breeden told the London Macro Policy Forum, "The more sparks we're throwing in the tinderbox, the more likely we might have to turn the hose on it."
- Investors assign a 75% probability to the BoE raising its Bank Rate in November, as British inflation is predicted to top 4% early next year, more than double its 2% target.
- Monetary Policy Committee member Swati Dhingra offered a less urgent perspective, saying Britain's long-term inflation pressures from the Iran war will become clearer over coming months; Governor Andrew Bailey is due to speak publicly on Friday.
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Bank of England rate setters warn of 'sparks in the tinderbox'
Two senior Bank of England interest rate-setters suggested on Thursday that they were getting closer to voting for an increase in borrowing costs, as unrelentingly high energy costs raised the risk of inflation getting stuck at high levels.
·London, United Kingdom
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Total News Sources4
Leaning Left0Leaning Right1Center3Last UpdatedBias Distribution75% Center
Bias Distribution
- 75% of the sources are Center
75% Center
C 75%
R 25%
Factuality
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