BoE governor Bailey signals further rate hikes in face of inflation uncertainty

Wage-price spiral

Elliot Gulliver-Needham
clock • 2 min read

Andrew Bailey, governor of the Bank of England, has warned that the central bank will likely continue to raise interest rates as inflation remains sticky.

In a speech today (17 May), Bailey warned that the bank was now set on preventing ‘second-round' effects on domestic wage and price setting, also known as a wage-price spiral. He added that "risks to inflation are skewed significantly to the upside", primarily due to risks of an intensifying wage-price spiral, which he added may take longer to unwind than it did to emerge. The length of a potential wage-price spiral had not been estimated in the bank's models, he said, as "the current circumstances are so unusual, it is hard to be precise about the extent of this asymmetry". UK Q...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on UK

'No difference in my view': Reeves LTAF-ISA decree not enough to force platforms to offer them
UK

'No difference in my view': Reeves LTAF-ISA decree not enough to force platforms to offer them

Retail platforms awaiting further rule change details

Eve Maddock-Jones
clock 16 July 2025 • 4 min read
LTAFs to be included in Stocks & Shares ISAs from April 2026
UK

LTAFs to be included in Stocks & Shares ISAs from April 2026

Wave of City reforms

Eve Maddock-Jones
clock 15 July 2025 • 3 min read
UK retail sales on the rise in June but outlook 'not all bright and sunny'
UK

UK retail sales on the rise in June but outlook 'not all bright and sunny'

Food sales up 4.1%

Sorin Dojan
clock 15 July 2025 • 2 min read
Trustpilot