BoE's Breeden (neutral) says firms and workers are likely to have less price and wage bargaining power, so second round effects less likely

Newsquawk StaffPublished 26 Mar 2026, 10:39 UTC

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BoE's Breeden (neutral) says firms and workers are likely to have less price and wage bargaining power, so second round effects less likely

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Where we are now is very different to last energy shock in 2022
Not wise to act before we have sufficient information
Will know more on balance of risks and scale and duration of shock by April meeting
Even with higher borrowing costs, Breeden does not expect a bust in borrowing as no boom before
Says measures BoE put in place after mini-budget are doing their job
Concerned that any reduction to bank capital would not go into increased lending, but instead to shareholders
Says gilt market functioning well amid Iran war volatility

Context

The BoE's Breeden presents a notably neutral stance, indicating a shift in bargaining power away from both firms and workers, which suggests reduced inflationary pressures from wage increases. His cautious approach underscores a growing consensus to wait for more data on economic shocks before making policy moves, reinforcing that current measures are stabilizing the situation. This could imply a stabilizing outlook for GBP and fixed income markets as uncertainties linger.

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