BoE’s Breeden: Firms Absorbing Energy Shock, Not Passing It to Customers

Breeden's remarks point to a quieter transmission channel for energy shocks: firms compressing margins rather than repricing output, which eases the inflation trade-off central banks have faced since 2022. The read-through matters most for rate-path expectations and for sectors whose earnings depend on pricing power holding up. Whether labour-market loosening genuinely breaks the wage-price feedback loop, or merely delays it, is the open question worth watching.