Governor Andrew Bailey recently signalled that the path ahead remains uncertain. Speaking to the Treasury Select Committee on 8 September 2026, Mr Bailey warned that inflation risks remain “on the upside,” specifically citing the volatility of energy prices as a primary concern for the committee.
Economic context and inflation risks
The remarks come at a time of renewed pressure on global economies. On 10 September, the European Central Bank (ECB) increased its main interest rate to 2.5%, pointing to persistent inflation risks exacerbated by ongoing tensions in the Middle East.
According to market reports, oil prices rose above $107 a barrel on 10 September. This surge in energy costs is expected to influence the Bank of England’s deliberations as it seeks to return inflation to its 2% target.
