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BoE’s Pill: We now need cautious cuts
Bank of England (BoE) Chief Economist Huw Pill commented on the policy outlook in his scheduled speech on Tuesday.
Key quotes
- Vote against interest rate cut was a 'skip' within a continuing withdrawal of monetary policy restriction.
- Inflation pressure indicators give me cause for concern.
- Quarterly pace of 25 bps cuts seen since last summer is too rapid given the inflation outlook.
- My dissenting vote was favouring a 'skip' in the quarterly pattern of bank rate cuts.
- It should not be seen as favouring a halt to withdrawal of restriction.
- Structural changes in price and wage setting behaviour have increased the intrinsic persistence of the UK inflation process.
- Pace of quarterly cuts too rapid given the balance of risks to price stability we face.
- Believe that the underlying disinflation process remains intact.
- Prospective path of bank rate from here is downward.
- My dissent from that decision does not reflect a fundamental difference with the committee majority.
- We now need cautious cuts.
- We should not be dependent on how data turns out.
- We can't assume that inflation pain of new economic shocks will go away.
- I agree with the MPC view that there is an easing in the labour market, question is about the pace.
- Some key pay indicators remain quite strong.
Market reaction
GBP/USD is holding its retreat from near 1.3400, adding 0.08% on the day to trade at 1.3373, as of writing.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
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