BoE’s new Chief Economist Huw Pill said UK inflation is likely to rise “close to or even slightly above 5 per cent” early next year. And, “that’s a very uncomfortable place for a central bank with an inflation target of 2 per cent to be.”
As for market expectation of a November rate hike, Pill declined to disclose his stance, and just said it’s “finely balanced”, “November is live”. And he added, “maybe there’s a bit too much excitement in the focus on rates right now”.
“The big picture is, I think, there are reasons that we don’t need the emergency settings of policy that we saw after the intensification of the pandemic,” said Pill. “The settings that we now have are supportive settings. The need for support has diminished, as this bridge has been built and largely traversed.”
