BoE’s Bailey: Market Interest Rate Curve Reflects Investor Inflation Risks
Bank of England Governor Discusses Market Expectations and Risk Premiums
Investor Concerns Over Energy Prices
Sept 8 (Reuters) - Bank of England Governor Andrew Bailey said the market curve for interest rate expectations reflected investors adding a "risk premium" because of their worry about further energy price increases.
Analysis of Market Curve and Policy Tightening
Central Bank’s Perspective on Investor Pricing
Bailey told lawmakers from parliament's Treasury Committee that the central bank's analysis showed investors were pricing in additional tightening in policy, on top of what could be explained by expectations for BoE policy moves alone.
Risk Premium in Market Curve
"When you look at the market curve, and when you break the market curve down as far as we can do ... they've got essentially a risk premium in there," Bailey told lawmakers from parliament's Treasury Committee.
Clarification on Future Rate Hikes
Conditional Nature of Policy Decisions
Bailey added that he wanted to dispel the idea that a rate hike from the Bank of England was a question of "when" rather than a possibility that hinged on developments in the economy.
Governor Bailey’s Statement on Policy Transparency
"What I want to dispel is the idea that we've really got a secret plan, we know where we're going to go to and it's unconditional."
(Reporting by David Milliken and Sam Tobin, writing by Andy Bruce, editing by William James)
