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According to Reuters, Lombardelli said prolonged increases in energy costs could create broader inflationary pressures by influencing inflation expectations, wage negotiations and the way businesses set prices. She said the longer energy prices remain high, the greater the risk that these indirect effects become embedded in the economy, making it harder for inflation to return to target. Read more: US market ends down as oil prices, Treasury yields rise Lombardelli's comments came in a speech at the Sixth Biennial Conference on Macroeconomic Policy in Warsaw, as central banks continue to assess the impact of energy-price pressures on inflation. The BoE official stressed that monetary policy should not respond mechanically to changes in energy prices. Instead, the central bank needs to assess whether higher energy costs are beginning to feed into inflation expectations, wage bargaining and corporate pricing behaviour. Read more: Global Market Today: Asian stocks waver on inflation, rate concerns If those second-round effects become more pronounced while there is no clear evidence of weaker economic activity or disinflation, monetary policy may increasingly need to become tighter, Lombardelli said, according to Reuters. Her comments highlight the challenge facing the BoE as policymakers balance persistent inflation risks against the possibility that higher borrowing costs could further weaken economic growth. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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