BoE’s Pill: The question of sufficient policy action more finely balanced

BoE Chief Economist Huw Pill noted today that the pressing question of whether tigthening has been adequate to curb high inflation is becoming “more finely balanced”.

Over the past two years, the BoE has executed 14 consecutive interest rate hikes, a strategy that is still in the process of fully impacting the economy. “We have done a lot over the last two years. A lot of that policy is still to come through,” Pill told a panel discussion at IMF meetings in Morocco.

But, “Whether we’ve done enough – or whether we have more to do – I think is becoming a more finely balanced issue,” he added. Despite this, Pill assured that the bank remains committed to ensuring inflation returns to the 2% target on a lasting basis.

On the topic of potentially reducing rates, Pill deemed such conversations premature. He reaffirmed the bank’s position that high borrowing costs are likely to be maintained for a duration.