Bank of England Deputy Governor Sarah Breeden said UK companies are seeking to absorb the energy shock and cut costs themselves rather than pass higher prices on to consumers — even as two other officials appeared to make the case for raising interest rates.

Breeden's remarks suggest she is cautious about the need for a rate hike. She pointed out that a weak labor market is holding back wage pressure, while the private sector has shown resilience after yet another unexpectedly solid gross domestic product (GDP) reading published earlier on Thursday.

"What's really different now compared with the last energy shock in 2022 is that people aren't looking to pass on costs," she said in an interview in Bangkok on Thursday. "When I go and talk to businesses, many of them have hedged, which means they're feeling less of a shock now than they otherwise might have."

Breeden's tone was more dovish than that of many of her colleagues, who have hinted they are leaning toward supporting a rate hike as soon as next month. Earlier on Thursday, fellow Bank of England policymaker Megan Greene made the case for raising rates to "guard against the risk of second-round effects."

Greene, who voted for an immediate rate hike last month, was in the minority. She said there is growing evidence that the UK economy's "spare capacity may have peaked," citing the stronger-than-expected GDP data published that morning.

"The likelihood of second-round effects feeding through is actually quite high," she said at an event in the Thai capital, where the International Monetary Fund is holding its annual meetings.

At another event, Bank of England Chief Economist Huw Pill — a well-known hawk on the Monetary Policy Committee — warned that upcoming wage agreements pose a threat: the negotiations are taking place as inflation is expected to breach 4% early next year. He said activity and the labor market are showing resilience in a supply-constrained economy.

Traders are betting that renewed gains in oil and gas prices will force the central bank to raise interest rates in November for the first time in more than three years. Governor Andrew Bailey, a key swing vote, has said that the longer the energy shock and the Middle East conflict drag on, the harder it will be to avoid higher rates.

Bank of England officials say there is still little evidence that inflation is spreading broadly through the economy, while Thursday's GDP data point to another strong performance in the third quarter.

Breeden said businesses have "learned their lesson" — the last energy shock came four years ago when the Russia-Ukraine war broke out.

"We've been surprised by how well the economy has absorbed this quite considerable energy price shock so far," she said. "What's encouraging is that I have a sense — as we saw in this morning's GDP data — that economic activity hasn't fallen off a cliff. The labor market is getting through this, and the willingness of businesses to absorb the shock themselves rather than pass it on makes our job as policymakers monitoring the situation slightly easier in this uncertain period."

She stressed, however, that whether the impact of the energy shock has been blunted or merely delayed remains an open question.