LONDON, April 16 (Reuters) - The Bank of England was "not going to rush to judgements" on interest rate rises, Governor Andrew Bailey told BBC News, as global central banks contend with an energy
Bank of England Signals Caution on Rate Hikes Amid Energy Price Shock
Central Banks Respond to Global Energy Price Shock
Bank of England's Stance on Interest Rate Decisions
LONDON, April 16 (Reuters) - The Bank of England was "not going to rush to judgements" on interest rate rises, Governor Andrew Bailey told BBC News, as global central banks contend with an energy price shock driven by the Iran war.
Bailey, in Washington for the International Monetary Fund's spring meetings, said higher oil and gas prices would certainly feed through to prices, but that other factors made a decision on rates "very, very difficult", according to the report.
Uncertainties Facing the UK Economy
"There's really difficult judgements to be made," Bailey said. "We're not going to rush to judgements on those things, because there are a lot of uncertainties around this, not just how it's going to play out, but also how it's going to pass through into the UK economy."
IMF's Economic Outlook and Global Risks
The IMF on Tuesday cut its growth outlook, citing war-driven energy price spikes and supply disruptions, and said the global economy could be driven to the brink of recession if the war widens and oil stays above $100 per barrel through 2027. Britain suffered the sharpest downgrade among large rich economies.
Impact on Major Economies
Echoing Bailey's remarks, European Central Bank policymaker Alexander Demarco said policymakers needed be patient and not rush any decision, while acknowledging that the euro zone economy may be moving towards the ECB's adverse scenario.
ECB's Approach to Monetary Policy
The comments from both policymakers underscored a cautious approach to monetary policy due to uncertainty over the economic impact of the energy price shock, and followed the IMF's advice to central banks to signal an objective to "protect price stability, but don't rush".
Looking Ahead: Upcoming Bank of England Decision
Bailey said in March - when the central bank held rates - that financial markets were getting ahead of themselves in expecting rate increases following the decision. The bank's next rates decision meeting is on April 30.
(Reporting by Muvija M, editing by Andy Bruce)
