# BoE Governor Warns Energy Prices Limit Inflation Impact

> BoE's Andrew Bailey says energy price hikes have so far limited UK inflation but rate risks remain high.
- Title: BoE Governor Warns Energy Prices Limit Inflation Impact
- Summary: BoE's Andrew Bailey says energy price hikes have so far limited UK inflation but rate risks remain high. Bank of England Governor Andrew Bailey warns that…
- Keywords: bank of england, andrew bailey, uk inflation, energy prices, interest rate hikes, monetary policy, inflationary pressures, uk economy, benchmark interest rate, money, business, BoE
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/us-stocks/wall-street-guide/boes-bailey-says-energy-price-pass-through-remains-limited-rate-risks-persist/articleshow/134986792.cms
- Author: Anupam Nagar
- Published: 2026-10-16T07:49:00+00:00
- Read time: 1 min
- Topics: bank of england, andrew bailey, uk inflation, energy prices, interest rate hikes, monetary policy, inflationary pressures, uk economy, benchmark interest rate, money, business
## BoE rate decision
Most economists now expect the Bank of England to begin raising interest rates next month.
## Energy prices impact
Bailey said soaring energy prices have so far limited broader effects on british prices.
## Second-round inflation risks
Bailey warned it is too early to assess the full extent of potential second-round inflationary pressures.
## Business cost pressures
Businesses are focusing heavily on cutting costs and struggling to pass higher energy expenses on to customers.
## Monetary policy stance
The BoE held its benchmark interest rate at 3.75% with six members voting to keep rates unchanged.
## Inflation rate concerns
Bailey described the august inflation rate of 3.1% as deeply frustrating, remaining well above the boe's 2% target.
## Geopolitical impact
Middle east conflicts have pushed energy prices higher and contributed to volatility in british government bond markets.
## Economic resilience
Data showed uk economic growth in august was the strongest since october 2022, providing a more encouraging picture.
## Rate hike implications
A rate hike could help contain inflation expectations but put pressure on mortgage borrowers and companies facing higher costs.
## Key takeaway

Bank of England Governor Andrew Bailey warns that energy price increases have not yet caused widespread inflation in the UK, but second-round inflation risks persist as the central bank weighs rate hikes.