BoE's Taylor says right policy response is therefore vigilant but disciplined and monetary policy should not react mechanically to movements in energy prices if those movements remain primarily relative-price shocks

Case for further rate increases is not compelling to him unless energy prices remain high for an extended period and also generate clearer signals of a transmission into broader inflation persistence. Evidence points against a general inflation shock. The current policy stance is restrictive enough. BoE agents of survey of firms' wage intentions, due in Jan 2027, will be a very significant data point. Not seeing any clear signal of building second roun effects. If wage growth expectations stay near 3%, that would be reassuring. Every time oil futures curves rise, greater the risk they get to a 2022 type inflation scenario. Does not know if the BoE can do a single "insurance hike" that would not be misintrepreted as the start of a series.