BoE Chief Economist Huw Pill emphasized today the readiness of the Bank to raise interest rates further if the situation demands, but also indicated that further rate hikes are not a necessity at the current juncture.
Pill highlighted today’s wage growth data, noting, “We did have this morning the latest official data on pay growth in the UK with pay growing at 7.7%… But actually over the summer pay growth has remained very strong and we certainly wouldn’t see pay growth of that rate as consistent with achieving the 2% inflation target on an ongoing basis.”
BoE is closely monitoring the upcoming October CPI data, anticipating a decline to “around 5%.” However, Pill acknowledges that even this level is significantly higher than the target, remarking, “But nonetheless, 5% is still much too high.”
Pill also expressed concerns about the persistence of inflation, partly attributed to ongoing supply issues. He stressed the importance of maintaining a consistent policy approach, stating, “We need to meet inflation persistence with persistent restrictiveness in policy.”
