🔻The Governor of the Bank of England rejects the secondary impact of the Iran–U.S. war on the economy of Britain

Andrew Bailey, the governor of the Bank of England, said on Friday that there are still few signs that the surge in energy prices caused by the war between Iran and the United States has created serious and long-lasting inflation pressure in Britain.

In an interview with Bloomberg Television, he said that so far the “spillover effects of the war have been relatively limited.”

He also said that the weakness of the labor market has limited workers’ ability to bargain for and demand higher wages, and this has helped rein in inflation. He added that he cannot give any guarantees about the future path of the economy.

Bailey is one of six members of the Bank of England’s Monetary Policy Committee who recently voted to keep the interest rate at 3.75% in Britain.

Reuters reported that financial markets on Friday priced in a probability of a 25 basis point increase in interest rates by the end of the current year by the Bank of England. In the past month, Bailey had said that this market expectation mostly reflects concerns about an escalation in the Iran–U.S. war, not the Bank of England’s monetary policy.