Bank of England boss issues Iran war warning to householders

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[00:00:00]Uh, Paul Kelso, Sky News. Governor, a question about scenario C, what we might call the worst-case scenario you've set out today. Consumers will see potential inflation at 6.2% interest rates at above 5% again, and they have very recent memories of what that feels like. We've had extraordinarily high inflation from which many households haven't recovered.

[00:00:23]So, the question many will have is what they're looking for is a sense of how likely is that to come to pass? Well, I I Going back to the point I I made in response to Marine's question, the sheer volatility of what we're looking at makes it, I think, very hard to put probabilities on things. This is the problem, one of the problems we're dealing with. So, you know, we've been very careful not to put probabilities on these scenarios because it moves around too much.

[00:00:49]I think the point I would make though, and I think reiterate something I said earlier, this is very important.

[00:00:55]The longer this general state goes on, the more difficult it becomes.

[00:01:01]Uh, yeah, I'm afraid that's, you know, that is something we can sort of fairly easily deduce. So, look through the volatility.

[00:01:10]The longer this this problem goes on, and the longer the the disruption to energy supplies goes on, it things all other things equal, it's likely that therefore energy prices will stay higher, and and the more difficult the scenario the the scenario we're in.

[00:01:22]But, the one thing I would add is the numbers that in that scenario show what happens under the market path. So, assume the market path. If we were in a scenario where we saw much higher inflationary pressures like that, we would, of course, have to take policy action to lean against them, and so that would bring inflation down.