BoE Deputy Governor Lombardelli: Energy Shock More Persistent, Further Rate Hikes Possible

The shift in tone from a BoE deputy governor matters less for the near-term rate path than for what it reveals about the inflation fight: an energy shock that was treated as transient is now being framed as persistent, with second-round effects the key risk. That framing raises the bar for any pivot to cuts and keeps pressure on rate-sensitive sectors, from housing to leveraged crypto and tokenized RWA yield products that price off the front end. Whether activity resilience holds up as disinflation stalls is the open question, and it is the variable that will decide if this is a hawkish pause or a genuine re-tightening cycle.