Bank of England Governor Bailey said that the impact on energy costs caused by the US-Iran war is still limited on overall British inflation, but as time passes, it is becoming more and more difficult to avoid the wider impact of inflation. “We need to focus on the transmission of this inflationary shock to indirect effects and second-round effects.” In an interview, Bailey said, “Looking at it so far, this kind of transmission is relatively mild in the UK, which obviously encourages me. But the longer it lasts, the harder it is to deal with the situation.” When asked if UK interest rates would be raised soon, Bailey did not directly respond. He said, “The analytical framework we have always relied on hasn't changed.” Last month, Bailey warned that the longer oil and gas costs remain high, the harder it will be to resist the pressure to raise interest rates.

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