Lombardelli ties Bank Rate path to wage growth and energy prices
The Bank of England deputy governor says wage growth is still too high for the inflation target to hold
Published · Updated
UpdateThursday, September 24, 2026 at 4:10 AM ET
The later filing refers to Lombardelli as "he", correcting the published piece's use of "she".
Lombardelli said policy is increasingly likely to need to tighten if energy prices stay elevated without clear evidence of disinflation or weaker activity. He added that he is not suggesting policy should respond mechanically to swings in energy prices.
Bank of England deputy governor Sarah Lombardelli says wage growth remains too high to be consistent with the inflation target. She named persistence in energy prices and evidence of disinflation as the factors that will determine whether the Bank Rate needs to rise further.
The Bank held its rate at 3.75% last week, despite three policymakers pushing for an immediate increase. BofA now expects the Bank of England to hike in November and February, reversing its earlier call for a cut.
Markets are already pricing four to five quarter-point rate rises by the end of 2027.
Lombardelli's conditional language reinforces what traders have already priced in. Her remarks add no new pressure to the hiking path the market expects, leaving the near-term outlook for rates, and for sterling, unchanged.