A slew of BOE officials are speaking including BOE head Bailey is speaking (along with other BOE officials) and says:
- Financial market tightening gives us some time to assess whether to raise rates.
- We have a softening picture for growth and labor market.
- Market futures curves seem fairly benign compared to damage to East gas infrastructure.
BOE’s Mann is also speaking and says:
- I am worried about possible high inflation in late 2026 getting embedded in wage deals for 2027
MPC Dhingra adds:
- Looks like there is enough restrictiveness to avoid tightening if BOE’s “Scenario B” takes place
BOE Breeden chimes in with:
- if it does look like we are moving to prolonged Middle East conflict with pronounced second round effects, will need to move quickly and possibly force fully.
For some color, here’s a summary of the Bank of England’s Scenario B from its April 2026 Monetary Policy Report:
- In response to the uncertainty caused by the Iran war and its impact on energy prices, the BOE abandoned a single economic forecast and instead published three scenarios — A (mild), B (moderate), and C (severe).
- Scenario B is the moderate case. Energy prices peak at similar levels to Scenario A but remain elevated for longer, rather than being short-lived. This more persistent energy shock generates stronger second-round inflationary effects than in Scenario A — meaning higher costs work their way more deeply through wages and broader pricing behavior. Inflation still peaks at just over 3.5% at the end of 2026, similar to Scenario A, but then falls back to close to 2% over approximately three years
BOE Bailey: Financial market tightening gives us some time to assess raiseing rates or not
