{"text":[[{"start":9.4,"text":"Bank of England governor Andrew Bailey is likely to lead a majority vote for interest rates to be kept steady on Thursday, but the meeting is set to reflect rising anxiety within the Monetary Policy Committee about the inflation risks posed by the prolonged energy crisis. "}],[{"start":26.25,"text":"The MPC is widely expected to keep its key rate unchanged at 3.75 per cent after senior officials led by Bailey and deputy governor Sarah Breeden called for the central bank to tread carefully before acting on rising inflation risks. "}],[{"start":41.95,"text":"Breeden told the FT last month that the BoE cannot afford to be “trigger-happy” on rates given the damage geopolitical turmoil is doing to the economy and the loosening labour market. "}],[{"start":53.2,"text":"“Momentum in the labour market has cooled significantly,” said Hetal Mehta, an economist at wealth manager St James’s Place. “I don’t think there is enough impetus to warrant a rate hike at this point.”"}],[{"start":66.15,"text":"But at least two rate-setters — chief economist Huw Pill and external member Megan Greene — have signalled they will demand an immediate rate rise. Catherine Mann, another external MPC member, has left the door open to a rise at some point if the energy crisis worsens. "}],[{"start":83.2,"text":"Two other BoE deputy governors — Dave Ramsden and Clare Lombardelli — have not given recent signals of how they plan to vote at the meeting. "}],[{"start":92.10000000000001,"text":"The gathering comes days after the European Central Bank lifted its own key rate by a quarter-point to 2.25 per cent, while the Bank of Japan is widely expected to lift rates on Tuesday. Some economists see increasing pressure on the US Federal Reserve to tighten policy before the end of the year. "}],[{"start":111,"text":"UK inflation subsided to 2.8 per cent in April, but analysts polled by Consensus Forecasts expect it to accelerate to 3.3 per cent for the year as a whole as higher oil prices combine with an increase in the energy price cap this summer. "}],[{"start":126.05,"text":"Pill and Greene have both called for pre-emptive rate increases to prevent a self-fulfilling spiral of upward wage and price pressures that could worsen UK inflation."}],[{"start":136.75,"text":"But the bulk of economic data thus far has not signalled brewing dangers. While the UK economy grew by a strong 0.6 per cent in the first quarter, data on Friday showed a contraction in the single month of April. "}],[{"start":150.1,"text":"The BoE’s Decision Maker Panel survey suggests companies see only modest pressure to respond to the rising cost of living by boosting wages, with expected year-ahead wage growth down slightly from 3.5 per cent in the three months to March to 3.4 per cent in the most recent period. "}],[{"start":167.85,"text":"This is partly because the UK labour market has continued to weaken. The number of job openings fell to 705,000 in the three months to April, the lowest since 2021. Medium-term inflation expectations among firms and households remain at similar levels to those before the Middle East crisis. "}],[{"start":187.95,"text":"Part of the reason the BoE has felt able to keep rates unchanged is that it went into the energy crisis with rates above most policymakers’ estimates of the neutral level that neither boosts nor curbs inflationary pressure. That contrasts with the ECB’s neutral pre-crisis setting of 2 per cent. "}],[{"start":206.79999999999998,"text":"Bailey has said the central bank is also able to hold fire because markets immediately priced in tighter policy after the BoE’s March meeting, exerting downward pressure on UK economic activity. But policymakers including Greene argue the central bank will ultimately need to act to validate investor expectations of higher rates. "}],[{"start":227.24999999999997,"text":"Tighter financial conditions are, for now, offsetting wider inflationary pressures stemming from the energy shock, she wrote in an FT commentary earlier this month. "}],[{"start":237.04999999999998,"text":"“But that won’t last in the absence of interest rate increases. The longer the war persists, the greater the case for hiking.”"}],[{"start":252.7,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1781508239_4274.mp3"}