BOE’s Bailey sees subdued inflation effects, businesses focus on cost-cutting

Each sentence links inside to the piece that supports it.

Households, businesses and the Bank of England all have a signal here about how firms are behaving now: Bailey said companies are focusing on cutting costs rather than on inflation. That matters today because it points to how wage and price-setting are being viewed as the inflation picture develops.

In practice, the picture is not that energy costs have already shown their full effect or that firms are uniformly passing them through. Bailey said it is still early to see the full impact of energy prices on inflation, and he said only that a prolonged period of higher costs would squeeze margins and could lead some firms to raise prices. (per ft.com)

The move was larger before the first headline than after. That is an observation, not an explanation: the market also moves on things nobody publishes.