Bank of England Governor Andrew Bailey Sees Limited Inflation Spillover

Bank of England Governor Andrew Bailey said evidence that higher energy costs are spreading into wages and broader prices remains limited, as U.K. inflation stayed above the central bank’s target in August. Bailey described businesses as focused on cutting costs, while the broader effects of price increases on wages and prices remained subdued. U.K. inflation was 3.1% in August, compared with the Bank of England’s 2% target. The remarks add to the policy debate after Bailey’s earlier warning about prolonged high energy prices , which could make it harder for the Bank to keep interest rates unchanged. Upcoming inflation and wage-growth data will provide further signals ahead of the Bank of England’s next rate decision, scheduled for Nov. 5.

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