Hike rates

BOE chief economist signals readiness to hike rates faster

(Bloomberg) —

The Bank of England is ready to raise interest rates faster if needed to prevent inflation from taking hold, chief economist Huw Pill said.

The remarks are among the clearest signals yet that BOE insiders such as Pill, who have previously expressed doubts about the half-point rate hike, could be considering such a move in August. The BOE, which has raised rates in five consecutive meetings, has previously moved in smaller increments than some of its international peers.

The BOE’s June pledge to “act forcefully” to keep inflation down “reflects both my willingness to adopt a faster pace of tightening than has been implemented so far in this tightening cycle , while simultaneously emphasizing the conditionality of any such change of pace on the flow of new data and analysis,” Pill said in a speech Wednesday.

“Much remains to be resolved before we vote on our August policy decision. How I vote on this occasion will be determined by the data we see and my interpretation of it,” he added.

Yet Pill also said the BOE’s updated guidance was designed to give greater flexibility to its communication and reflected both the uncertainties the BOE faces and the likelihood that future decisions will be more finely balanced as that officials assess the competing forces of faster inflation and weaker growth. .

He added that this shows that officials will prioritize “the more persistent component of inflation developments over the overall one-off measure” when it comes to making decisions, he said. -he declares.

©2022 Bloomberg LP