By Bank of England ready to do more on inflation if needed – Pill
Bank of England ready to do more on inflation if needed – Pill By Reuters
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Economy 19 minutes ago (Feb 06, 2023 18:29)
© Reuters. FILE PHOTO: A general view of the Bank of England (BoE) building in London, Britain, August 4, 2022. REUTERS/Maja Smiejkowska/File Photo
LONDON (Reuters) – Bank of England Chief Economist Huw Pill said on Monday that the British central bank was prepared to do more to get inflation back to target after it suggested last week that interest rates were approaching their peak.
“I do have high degree of confidence (about getting inflation to target) because we know what we’re going to do. We’ve done a lot to achieve it, we’re prepared to do more as necessary to ensure that we achieve it sustainably,” Pill said in an online Q&A session.
“And I don’t think anyone is changing their mind or getting cold feet or anything like that.”
Britain’s headline inflation rate fell to 10.5% in December after touching a 41-year high of 11.1% in October.
The BoE last week raised rates for a 10th meeting in a row but dropped its message that it was prepared to carry on increasing borrowing costs “forcefully” if needed.
Pill said the BoE had to “guard against doing too much” given the typical 18-month lag for rate hikes to impact the economy and the risk that it could push inflation too low.
“We are reaching the point where those types of concerns are in the forefront of our minds,” he said. “But if you ask me where we are at the moment, I think we are still more concerned about the potential persistence of inflation.”
Asked when the BoE might cut rates, he said concern about inflationary pressure in the labour market “probably tilts us to saying we haven’t quite got to the point where we’re confident to engage in a discussion of a turning point in rates.”
Earlier on Monday, another BoE rate-setter Catherine Mann said she backed more increases in borrowing costs and warned that pausing now risked creating a confusing “policy boogie” if it turned out rates would need to rise again.
Bank of England ready to do more on inflation if needed – Pill
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