LONDON, (Reuters) – The rise in energy prices resulting from Russia’s invasion of Ukraine is likely to hurt British economic growth and increase short-term inflation pressures. This was the Bank of England policymaker Silvana Terreyro stated on Wednesday.

Tenreyro indicated that it was premature to determine how the tradeoff will play out and said policymakers would review this at March’s Monetary Policy Committee Meeting and whenever the BoE update its forecasts in May.

Recent developments will increase the trade shock we are already feeling, which will cause inflation to rise and negatively impact activity. What exactly is that? “That’s what we’ll start next week,” she stated at an Economic Research Council discussion.

Markets expect that the BoE will raise rates to 0.5% and 0.75% respectively on March 17, as well as to 1.5% for August. The central bank wants to keep rising inflation in check.

Tenreyro (who voted against BoE’s December rate hike after pandemic due to concern about Omicron variant threat) said there wasn’t any evidence that wage-price spirals were taking root in Britain.

According to the BoE, inflation will peak at 7.25 percent in April according to their forecast. That was just before Russia invaded Ukraine.

Tenreyro stated that she was surprised at the expected wage increases for 2022 in BoE’s survey of companies and wasn’t sure if they would happen.

Spirals are explosive dynamics, which are not yet visible. She said that we have just begun the first round of spirals, and she couldn’t speak about the second round (effects).