Until recently, markets had largely expected UK rates to fall over the year. That view has been challenged by the risk of renewed inflation as energy prices rise, leading to debate over whether rates will be kept on hold for longer, or possibly increased.<\/p>\n
Central banks tend to raise rates when inflation runs hot, to curb demand, and reduce them when growth weakens, to support borrowing and spending. The present risk, Bailey suggested, is that elevated energy costs could push prices higher<\/a> while also weighing on activity, complicating the policy response.<\/p>\n \u201cThere\u2019s really difficult judgments to be made,\u201d the Bank of England governor said. \u201cWe\u2019re not going to rush to judgments on those things, because there are a lot of uncertainties around this, not just how it\u2019s going to play out, but also how it\u2019s going to pass through into the UK economy.\u201d<\/p>\n
<\/p>\n NEW & EXCLUSIVE<\/p>\n Bank of England Governor Andrew Bailey tells BBC News at Ten at the IMF Meeting that the world is facing a \u201cvery big energy shock\u201d but that \u201cit won\u2019t rush to judgement\u201d on rate rises\u2026 talk of four this year \u201cseriously\u201d \u201cway ahead of yourself\u201d\u2026 MORE soon pic.twitter.com\/ze5miG6Hb7<\/a><\/p>\n