MNI BRIEF: BOE's Pill Sees Scope For Rate Cut, Data Key

Bank of England Chief Economist Huw Pill said on Friday that measures of persistent inflation were beginning to decline, providing the opportunity for a rate cut.

Pill stressed that data in the six weeks before June’s meeting were key but his comments at a BOE agents event made clear he is not strongly opposed to a near-term cut, unlike some more hawkish colleagues. With two of nine MPC members voting for a cut at the May meeting, easing momentum appears to be growing.

"We are seeing that persistent components of inflation on which we focus .. beginning to decline ... and that translates into the possibility that Bank Rate can be cut," Pill said.

He said there were divisions on the Monetary Policy over interpreting inflation persistence, whose behaviour will be more important than headline inflation ahead of June’s meeting. (See MNI POLICY: BOE Split Over Measures Of Inflation Persistence)