BoE's Taylor Sees Weak Case for Rate Hikes

Bank of England policymaker Alan Taylor said further interest rate increases are not justified unless high energy prices persist and begin driving broader, lasting inflation. He acknowledged that rising oil and gas prices could lift headline inflation over the winter, but said evidence of spillover into wages, services and other prices remains limited, pointing to cooling wage growth, falling food inflation and a softer labor market. Taylor argued that the current economy appears less vulnerable to a repeat of the broad inflation surge seen in 2022 and that current interest rates are already sufficiently restrictive. His cautious position contrasts with warnings from other policymakers that inflation could become entrenched and rates may need to rise, as the committee remains divided over its next steps.