In a speech today, Bank of England Chief Economist Huw Pill urged “caution in” reducing monetary policy restrictions, emphasizing the need for a “gradual” approach to rate cuts.
Pill highlighted that his “modal outlook” aligns with a scenario of “continued disinflation,” but warned that this depends on maintaining a “restrictive monetary policy stance to bear down on inflationary pressures.”
He stressed the importance of caution, noting there is still “ample reason” to carefully assess whether inflationary persistence is fully dissipating. While further reductions in the Bank Rate are expected if the economic and inflation outlook remains on track, Pill warned against the risk of “cutting rates either too far or too fast.”
Pill was one of the four dissenting members of the MPC who voted against BoE’s rate cut in August, underscoring his preference for a more measured approach in unwinding monetary tightening.
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