UK companies are stepping up cost-cutting in response to surging energy prices. Markets are pricing in a November rate hike by the BoE as it assesses the impact on wages and the labour market.
Bank of England (BoE) Governor Bailey (ベイリー) said UK companies were stepping up cost-cutting in response to surging energy prices. He said companies were taking steps to contain increases in raw material and labour costs.
He reiterated his view that upward pressure on overall prices from rising energy costs had so far been contained, but said the longer the current situation continued, the more difficult it would become.
The BOE has kept its policy rate unchanged, but cited signs from discussions with companies in various regions that efforts to contain rising costs were gaining momentum. He also indicated that it was still too early to assess the extent to which higher energy prices would feed through to wages and other areas.
Investors view a 0.25 percentage point rate hike in November as almost certain, and market attention is focused on the backdrop to monetary policy that differs from that of other central banks.