Speaking in the post-BoE press conference, BoE Governor Andrew Bailey said that the spread of Omicron is expected to have had a depressing impact on UK output in December and January, but that impact is likely to have been short in duration. The global rise in prices for energy and imports will inevitably push up inflation and weigh on incomes, he added. Demand for workers remains robust and job churn elevated, the BoE Governor continued, before adding that underlying pay growth was likely to rise to 4.75% this year before falling.

Rising domestic cost pressures driven by the tight labour market have pushed up inflation, he added, though upwards pressures on inflation are expected to dissipate as global energy prices stabilise. The government's new energy price policies are unlikely to have a material impact on inflation in two or more years' time, he added, though noted that there is unusually high uncertainty surrounding the economic outlook.