UK businesses are looking to absorb the energy shock and cut costs rather than hike prices for consumers, Bank of England Deputy Governor Sarah Breeden said as two other officials appeared to make the case for interest-rate hikes.

By Tom Rees, Irina Anghel and Philip Aldrick In comments that suggested caution on the need for higher rates, Breeden pointed to a weak labor market keeping wage pressures low and resilience in the private sector after another unexpectedly solid gross domestic product reading earlier on Thursday.

“What’s really different now relative to when we had the last energy shock in 2022 is that people aren’t looking to push costs through,” she said in an interview with CNBC from Bangkok on Thursday. “When I go and talk to businesses, many of them are hedged, and that means that the shock that they’re feeling now is less than it would otherwise have been.”Breeden struck a more dovish tone than many of her colleagues, who have suggested they are edging toward backing a rate rise as soon as next month.

Earlier on Thursday, fellow BOE policymaker Megan Greene made the case for rate rises to “lean against the risk of second-round effects” in inflation.

Greene, who was in the minority backing an immediate hike last month, said there’s mounting evidence that “slack may have peaked” in the UK economy, pointing to stronger-than-expected GDP data published this morning.

“The possibility for second-round effects to creep in are actually pretty significant,” she said at an event in the Thai capital where the International Monetary Fund is holding its annual meetings.

In a separate appearance, BOE Chief Economist Huw Pill, a prominent hawk on the Monetary Policy Committee, warned of the threat posed by upcoming wage settlements as negotiations take place with inflation set to top 4% early next year.

Activity and the labor market was showing resilience in a supply-constrained economy, he said.

Traders are betting that the resurgence in oil and gas prices will force the UK central bank into its first hike in over three years in November. Governor Andrew Bailey, a key swing voter, has said that higher rates will be more difficult to avoid the longer the energy shock and Middle East conflict drag on.

BOE officials have said there is still little evidence so far of inflation spreading widely across the economy and GDP figures on Thursday pointed to another strong performance in the third quarter.

Breeden said businesses have “learned the lessons” of the last energy shock four years ago when Russia invaded Ukraine.

“We’ve been surprised so far about how well the economy has absorbed what has been a pretty significant energy price shock,” she said. “What is encouraging is that I get the sense that as we saw with the GDP data this morning, activity isn’t falling off a cliff. The labor market is holding up through it, and there’s a desire to absorb the shock rather than just pass it on, which makes our job as monitoring policymakers a bit easier in these uncertain times.”However, she stressed it remains an open question whether the effects of the energy shock are diminished or merely delayed.