London Daily

Focus on the big picture.

BoE's Pill sees no victory over inflation yet but recession coming

BoE's Pill sees no victory over inflation yet but recession coming

The Bank of England (BoE) cannot consider the threats posed by inflation to be under control and interest rates will need to rise further but the economy is going into a recession, complicating the outlook, its chief economist said.
"I think we cannot declare victory against second-round effects, but we are entering a recession," Huw Pill said at a conference organised by the bank UBS on Tuesday. "That's a difficult trade-off environment for monetary policy."

Last week, the BoE raised borrowing costs by the most in more than 30 years when it increased Bank Rate by three quarters of a percentage point to 3.0% in a bid to smother the risks that an inflation rate running above 10% turns into a long-term problem.

But the central bank also told investors that they were pricing in too many interest rate increases in the future, a message that Pill said was an attempt to give a more realistic view of where Bank Rate was heading.

The former Goldman Sachs and European Central Bank economist said tightness in the labour market remained very persistent, despite the slowing economy, although "at some point" the BoE would have to think about the appropriate level of Bank Rate.

"We're not meant to be inflation nutters," Pill said. "We are meant to sort of manage this trade-off in a way that avoids unnecessary, counterproductive maybe, disruptions to the real economy."

Pill said he was sceptical that front-loading interest rate increases could bring about an "immaculate disinflation" with no real-world consequences, addressing criticism that the BoE had been too slow to raise borrowing costs.

Related Articles

London Daily
Homeless Displaced in Edinburgh to Accommodate Taylor Swift Fans
Public Uptake of AI Tools Remains Limited
New Tax Rules on Second Homes in the UK to Address Housing Crisis
Can Europe Transition to a War Economy?
France Implements Stricter Airbnb Regulations
Upcoming Pandemic Inevitable, Warns Former UK Chief Scientific Advisor
British Tourists Assaulted by Bouncers in Pattaya, Thailand
Facebook Delays Removal of Fake Account Exploiting TikTok Star
Billionaire Non-Domicile Flees UK Amid Tax Law Changes
Theresa May Admits Mistakes Over Immigration Policies
Nicki Minaj's Manchester Concert Canceled After Amsterdam Arrest
UK Conservative Party Proposes Mandatory National Service at 18
Kate Middleton's Public Absence Throughout 2024
Asylum Seekers Arriving In UK by Sea Exceed 10,000 This Year
UK Criticizes ICJ Order on Israel's Rafah Assault
Ukraine's Fight Against Corruption Gains Ground Amid War
Czech President Petr Pavel Injured in Motorcycle Accident
Record Number of Abortions in England and Wales
Paul McCartney Honours Bruce Springsteen at Ivor Novello Awards
US and UK to Reject ICJ Ruling on Israel's Rafah Offensive
World Court Orders Immediate Halt to Israeli Offensive in Gaza
Understanding FLiRT COVID Variants and Their Impact
Baltic NATO Members to Construct 'Drone Wall'
Global Life Expectancy Dropped By 2 Years Due To COVID-19
Macron Halts New Caledonia Voting Reform After Riots
Rishi Sunak Shelves Rwanda and Smoking Policies Ahead of Election
US Refuses World Court Jurisdiction
China Conducts Surprise Military Drills Around Taiwan
Grim Polls Predict Major Loss for PM Rishi Sunak
Rishi Sunak's Campaign for UK Election: Key Issues Highlighted
German Property Crisis Worsens as Foreign Investment Declines
Princess of Wales's Taskforce Calls for Business Investment in Early Childhood
Campaign Groups Condemn UK Report on Protests
Former Royal Marine Charged with Espionage Found Dead
Australian PM Calls for Julian Assange's Freedom
ICC Seeks Arrest Warrants for Israeli and Hamas Leaders
UK's Infected Blood Scandal: Conclusion Nears After Seven Years
Julian Assange Granted Right to Challenge US Extradition
Congo Army Thwarts Attempted Coup Involving Americans and a British Citizen
Ireland's Homeless Gain Voting Rights
Blinken orders crackdown on Israel-Hamas leaks
Julian Assange Faces US Extradition: Key Facts
Jacob Zuma Takes Campaign to ANC Stronghold Soweto
Attempted Assassination of Slovakia PM Robert Fico: Investigation Ongoing
What Happens If an Iranian President Dies in Office?
Spain Recalls Ambassador After Argentina President's Remarks
Rishi Sunak Faces Cabinet Backlash Over Proposed Changes to Foreign Student Visas
Rwanda Denies Entry to Human Rights Researcher
Iranian President Ebrahim Raisi Reportedly Killed in Helicopter Crash
Blue Origin Resumes Space Tourism with 90-Year-Old Ed Dwight