Bank of England's Bailey sees 'subdued' second-round inflation effects for now

Aug 28 (Reuters) - Bank ‌of England ​Governor ​Andrew Bailey said on Friday that he still saw little sign that the ‌surge in energy prices caused by the U.S.-Iran ⁠conflict was creating serious longer-term inflation pressures in Britain.

"So ‌far I think we're ‌seeing quite subdued second-round effects," Bailey said in an interview with Bloomberg TV at a ​U.S. Federal Reserve conference in Jackson Hole, Wyoming, reiterating his recent comments on the inflation ⁠outlook.

Bailey highlighted a soft labour market — which limits workers' ability to ​bargain for higher pay — as one factor restraining inflation, but added that he could ​make no promises about how ‌the economy would develop in future.

Bailey was part of the 6-3 majority ⁠on the BoE's Monetary Policy Committee who voted to keep interest rates on hold at 3.75% in July, ⁠when he told a press conference that he did ​not want to signal that the BoE was "edging towards a hike".

Financial markets on Friday priced in one quarter-point rate ‌hike by the BoE before the end of the year — pricing which Bailey ‌described in July as reflecting market worries about ⁠an escalation of ‌the U.S.-Iran war ​rather than the most likely path for BoE policy.

(Reporting by David MillikenEditing by William ‌Schomberg)

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