Bank of England has time to gauge impact of Iran war, Bailey says

LONDON, ⁠May 20 (Reuters) - A rise ​in interest rates in financial markets since the start of ​the ‌Iran war has given the Bank of England some ⁠time to work out its ⁠best response to the economic ​impact of the conflict, BoE Governor Andrew Bailey said on Wednesday.

A rise in mortgage borrowing costs were ​an ‌example of how investors had shifted their stance since the conflict began, Bailey told lawmakers on parliament's Treasury Committee.

"That tightening, I think also gives ​us ... some time to assess," he said.

Bailey was part ‌of the majority on the BoE's Monetary Policy Committee which voted 8-1 to ‌leave the central bank's benchmark interest rate on hold in April.

At that meeting, the MPC said its ​response to the energy shock caused by the war would ‌depend on its scale and duration and how it spreads through the economy.

Bailey told the lawmakers that ⁠the outlook ⁠for economic growth and labour market ‌had become softer with wage settlements reducing gradually.

But he also said ​market ​pricing for energy prices seemed "fairly benign" ‌compared to the damage done to gas infrastructure in the Middle East.