MNI BRIEF: BOE Pill Warns Against Cutting Too Far, Too Fast
MNI (LONDON) - Bank of England Chief Economist Huw Pill said Friday that there were plenty of reasons to be cautious in assuming that elevated inflation will not persist and he again made the case for gradual rate cuts, warning of the danger of moving too far or fast.
Pill, speaking at the Institute of Chartered Accounts, said that his central view was that while the UK may be in a self-sustaining virtuous cycle of declining inflation this would require the policy rate to remain restrictive, with services inflation remaining a concern.
"It will be important to guard against the risk of cutting rates either too far or too fast," Pill said, after Governor Andrew Bailey hinted in an interview published Thursday that the pace of easing could be accelerated. Markets have been fully pricing in a November cut but the probabilities attached to the Bank following up with another in December have fluctuated and Pill's remarks suggest the MPC is very likely to split in future meetings.