Bank of England Deputy Governors Sarah Breeden and Clare Lombardelli said sustained energy costs are increasing the risk that inflation becomes embedded in wages, price-setting and expectations, bringing them closer to supporting higher borrowing costs. Both voted to keep Bank Rate at 3.75% last week, but Breeden said policymakers should not wait for clear second-round effects before acting and that a rate rise was becoming increasingly appropriate as risks crystallise. Markets assigned a 75% chance to a quarter-point increase in November, fully priced another rise by February and were pricing roughly 100 basis points of increases over the following year. Sterling ended the week just above $1.32, near a three-month low, as the US dollar gained support from expectations of further Federal Reserve rate hikes. The BoE expects British inflation to exceed 4% early next year, more than double its 2% target, while Swati Dhingra said the lasting inflation effects of the Iran war would become clearer over winter and that inflation expectations were not yet a concern. UK consumer confidence reached its highest level in more than two years in September.