MNI BRIEF: BOE Bailey: Energy, Tight Labour Market Concerns

Bank of England Governor Andrew Bailey cited both

A very tight labour market and the risk of energy prices remaining elevated are factors weighing against inflation being transitory, Bank of England Governor Andrew Bailey said Wednesday.

Bailey told the Treasury Select Committee that high gas prices, which is "a European story", were the "biggest single contributor" to inflation and that while unemployment has fallen back to pre-covid levels inactivity is higher, particularly among older workers. "

We don't know if people are going to come back into the labour market or retire" and this labour supply shortage could feed through to higher wage pressures, Bailey said. He said that it was too early to say whether he would vote for a hike at the February meeting with the quarterly forecast round in its early stages.