Huw Pill, the chief economist at the Bank of England, appears hesitant about an interest rate cut in August but acknowledges it’s a matter of “when” rather than “if”. Speaking at Asia House in London, Pill highlighted recent economic data suggesting potential “upside risks” to his assessment of inflation persistence.
Recent figures on services inflation and wage growth, key indicators for inflation persistence, continue to show robust underlying dynamics. Services inflation decreased slightly to 5.7% in May from 5.9% in April, while annual private sector wage growth remains around six percent.
Despite headline inflation hitting target levels, Bank economists remain concerned about maintaining this stability with strong underlying price pressures. Pill noted the complexity of these data series but emphasized the persistent nature of UK inflation.
Looking ahead to the Monetary Policy Committee meeting on 1 August, Pill emphasized the need for more data before making policy decisions. While the Bank of England held interest rates at 5.25% in June, minutes revealed a finely balanced decision.
Following Pill’s remarks, the pound strengthened against the dollar, and the FTSE 100 edged lower as market expectations for an August rate cut wavered around 50%. Despite concerns, Pill expressed confidence that recent rate hikes had helped stabilize inflationary pressures.
“In the absence of major new shocks, the likelihood of Bank Rate cuts in the future remains a matter of ‘when’ rather than ‘if’,” he concluded.
For further reading:
– [August interest rate cut on a knife edge after ‘nuanced’ Bank of England survey](link to article)
– [Related Topics and People & Organizations](link to related topics)
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Huw Pill, the chief economist at the Bank of England, appears hesitant about an interest rate cut in August but acknowledges it’s a matter of “when” rather than “if”. Speaking at Asia House in London, Pill highlighted recent economic data suggesting potential “upside risks” to his assessment of inflation persistence.
Recent figures on services inflation and wage growth, key indicators for inflation persistence, continue to show robust underlying dynamics. Services inflation decreased slightly to 5.7% in May from 5.9% in April, while annual private sector wage growth remains around six percent.
Despite headline inflation hitting target levels, Bank economists remain concerned about maintaining this stability with strong underlying price pressures. Pill noted the complexity of these data series but emphasized the persistent nature of UK inflation.
Looking ahead to the Monetary Policy Committee meeting on 1 August, Pill emphasized the need for more data before making policy decisions. While the Bank of England held interest rates at 5.25% in June, minutes revealed a finely balanced decision.
Following Pill’s remarks, the pound strengthened against the dollar, and the FTSE 100 edged lower as market expectations for an August rate cut wavered around 50%. Despite concerns, Pill expressed confidence that recent rate hikes had helped stabilize inflationary pressures.
“In the absence of major new shocks, the likelihood of Bank Rate cuts in the future remains a matter of ‘when’ rather than ‘if’,” he concluded.
For further reading:
– [August interest rate cut on a knife edge after ‘nuanced’ Bank of England survey](link to article)
– [Related Topics and People & Organizations](link to related topics)