Speaking at a conference on monetary economics in Oxford on Friday, Bank of England Governor Andrew Bailey said the current impact of rising energy costs on the broader economy is "fairly muted." At the same time, he cautioned that it is too early to draw definitive conclusions.

Bailey warned that the longer elevated energy prices persist, the harder it will be for the central bank to refrain from further interest rate hikes. He also noted the Bank of England is taking into account rising mortgage rates when assessing economic and monetary conditions.

On the outlook, Bailey struck a relatively upbeat tone on artificial intelligence, suggesting that the technology could have a positive supply-side impact as economies face a series of adverse shocks.

Bailey's comments did not trigger an immediate move in the British pound. GBP/USD rose 0.18% on Friday.