BRIEF: Tentative Signs Inflation Persistence Easing - BOE Pill

Bank of England Chief Economist Huw Pill urged caution over policy easing Friday, saying that while headline inflation would likely fall below target in the spring what mattered was whether the more persistent elements of inflation eased substantially, and so far the signs of this were only tentative..

Pill said that his focus remained on services price inflation, pay growth and the tightness of the labour market and that so signs of a downward shift in these compoments "remain tentative (and) we have some way to go before such evidence becomes conclusive."

Pill, who voted for unchanged policy in Feb, said policy would have to remain restrictive but that was not the same as saying that there could be no cut. Bank insiders on the MPC have all set out a similar view, saying the debate is now whether to hold or cut, while making the case for caution over easing and offering no clear steer on the likely timing of the first cut. (See MNI INTERVIEW: BOE Right To Be Cautious Over Cuts - NIESR)