This time it's personal: the rise of dynamic, personalised pricing and what it means for inflation How personalised pricing is influencing inflation and shaping the future of price-setting for everyone.

Here's the full article (co-written by Lombardelli and Rupal Patel) www.bankofengland.co.uk/bank-insight...

AI and collusion: frontiers, opportunities and challenges How AI and pricing algorithms have the potential to facilitate collusion, and what businesses can do to mitigate risk.

There's also the risk - briefly alluded to by the BoE - that AI agents used by businesses to set prices effectively "collude"... something the UK Competition and Markets Authority has looked at here competitionandmarkets.blog.gov.uk/2026/03/04/a...

From a pure economic perspective, highly variable pricing can increase efficiency by discounting otherwise unused spare capacity (e.g. hotel rooms) or encouraging greater supply at peak times (an Uber surge charge).
But it's often perceived as unfair - and apparently more in Britain than elsewhere!

This time it's personal: the rise of dynamic, personalised pricing and what it means for inflation How personalised pricing is influencing inflation and shaping the future of price-setting for everyone.

Bank of England Deputy Governor Clare Lombardelli has a piece today on dynamic/personalised price-setting by businesses.
Two takeaways
1/ on average, it doesn't appear to raise prices
2/ but the greater *variance* of prices means people think prices are higher, boosting inflation expectations

Yes clearly there will be lots of lobbying and project viability will depend on cost of UK production + tax vs elsewhere. But maybe there's a landing zone if the aim is to boost tax receipts when prices are abnormally high (while project go-ahead is probably based on more conservative assumptions)

It's an industry that's easy to tax and so helps insulate the UK from fiscal/inflation shocks when energy prices spike (for the x years until there is a full renewable/nuclear transition), not that labour intensive so boosts productivity. And UK not drilling won't change minds in US/China/India....

Is the (implicit?) argument about North Sea drilling more that the gains to global oil companies from a surge in prices can be captured in the UK tax net (and so used to subsidise domestic consumers/industry)?

Exclusive: BoE's Bailey invokes 2008 lessons amid private credit scrutiny Bank of England Governor Andrew Bailey warned on Wednesday against dismissing recent private credit failures as isolated incidents, saying the sector's opacity could amplify shocks ​in a way that was ...

And here's what Bailey has to say about the risks from private credit - some similarities to subprime pre-2008 😱 - and the gilt market. "Stretched" but "orderly" and alarm bells ringing quite yet...
www.reuters.com/sustainabili...

The updated version of interview with BoE's Andrew Bailey is now out. Top lines:
- Markets getting ahead of themselves on rate hike bets
- BoE will act if needed - but keep in mind need to minimise hit to wider economy
- Businesses say they have little pricing power (unlike 2022)

Exclusive: Bank of England's Bailey says markets still ahead of themselves in pricing rate hikes Bank of England Governor Andrew Bailey said on Wednesday that markets were still getting ahead of themselves by pricing in ​interest rate hikes by the central bank in response to the ‌hit to the Briti...

Reuters had the pleasure of a chat with Bank of England Governor Andrew Bailey this morning.

A month into the Iran conflict, he still thinks markets have got ahead of themselves in betting heavily on rate hikes.

Initial take here - more to follow soon.
www.reuters.com/world/uk/ban...

Britain's Asda hit by motor fuel shortages as Iran war spurs demand British supermarket Asda is experiencing temporary fuel shortages at some of its forecourts after a surge in ​demand driven by the U.S.-Israeli war on Iran, its boss ‌said on Friday.

Interesting comments from Asda boss Allan Leighton on temporary fuel shortages as people try to fill up before petrol and diesel prices rise further.... www.reuters.com/world/uk/bri...

UK businesses show growth and inflation hit from Iran war British business activity ​has grown at the slowest pace in six months and manufacturers' input costs accelerated at the fastest rate since 1992, according to a ‌survey that underscores the risks to t...

A few data points for this morning
- UK flash PMI shows weakest growth in 6 months in March
- CBI retail sales shows biggest y/y fall in volumes since April 2020
- UK sells 10-year bond with highest yield since 2008
- Markets much calmer than yesterday

More here:
www.reuters.com/world/uk/uk-...

Chart of daily opening, high, low and closing yields for the two-year benchmark British government bond, since the start of 2026. Green lines are days when yields rose, red are days when yields fell.

Another pretty mad day on the gilt market - with the biggest intra-day swing in over 3 years for two-year gilts after Trump's comments on Iran.

Ten-year gilt yields also hit their highest since 2008.
Hopefully this chart of two-year yields gives a sense of how unusual the past few days have been.

Maybe you can brake for some of them next time?

“Earlier that day”, not “earlier today”

Yes it got buried a bit with the McFadden speech on youth unemployment earlier today. Seems to give the LPC a bit more leeway not to keep converting the 18-20 rate with NLW

I dimly thought that was a separate category to people who died intestate with no traceable relatives (where the Crown / government has more discretion)

Two-year gilt yields are now up over 30 bps on the day.

I hate to say it but that is truly a move of mini-budget proportions, if it persists - although a big difference is that the market seems to be functioning a lot better, so it's not the same in that regard.

Random thoughts on Gorton & Denton:

1. Found this genuinely hard to call. Being familiar with the area wasn't a huge help - probably the first election I've covered where I didn't get a very strong steer in any direction.

The Bank of England does not need to ‘follow the Fed’ The decisions of the US central bank can have a mixed impact on the domestic UK economy

The policies of the Fed impact economies globally, but that doesn’t mean other central banks have to follow the Fed. If the Fed were to implement surprise rate cuts, the Bank of England should arguably do the exact opposite.

My latest in @FT www.ft.com/content/fa99...

It’s been Reuters’ style for as long as I’ve been working here! I suspect it’s because we work globally at speed and £ symbols aren’t common on non-UK keyboards.

Not my call but I’ll pass the feedback on!

Beyond that, approaches to reduced minimum wages for younger workers vary even more.
France and a few other countries don't really do this; the UK pays 18-20 year olds 85% of the adult wage; the Netherlands about half.
(And it gets more complicated if you look at apprenticeships, tax breaks etc.)

Yes - the OECD has some reasonable data on this: relative to median earnings, the UK's minimum wage is the third-highest among advanced economies after New Zealand and France.

data-explorer.oecd.org/vis?tm=minim...

8/ That said, it's hard to disentangle more recent headwinds like a sluggish economy (possibly now turning round) that tends to push up youth unemployment, the April 2025 NICs rise (from which under 21s are largely exempt), AI (for grad roles), and more general inflation pressures on businesses....

7/ HMRC data shows the number of 18-24 year olds on company payrolls peaked in March 2023 - just before a 10-11% rise in the minimum wage and another the year after

Chart showing the correlation between job losses in a sector between March and October 2025 and the percentage of employees on or below the National Living Wage, by the NIESR think tank.

6/ Analysis by the NIESR think tank shows bigger job losses in sectors with more workers paid close to the National Living Wage (and ICT - possibly an AI effect)

Nine line charts, reflecting job vacancies in the UK, Germany and France for high, medium and low-paid roles, rebased to February 2020

5/ Indeed data shows a sharper fall in low-paid vacancies in the UK than in Germany, France or elsewhere, both in outright terms and relative to higher-paid jobs

Line chart of UK's main minimum wage rate and rates for apprentices and workers aged 18-20 from April 2018 to April 2026

4/ Britain's minimum wage is fairly high by European standards and has risen faster for younger workers. While it's hard to prove this is the reason for higher youth unemployment, there's some compelling evidence that this has hurt employment

3/ Fair or not, lower wages and/or a willingness to work erratic shifts are a key reason why some employers will take a chance on a younger worker without much specific experience

2/ People who were successful often had some kind of personal connection with the employer, either pre-existing or built up through trying to meet at the shop/bar etc