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MNI BRIEF: UK Inflation To Fall Faster In Q2 - BOE's Pill

(MNI) London

The Bank of England expects inflation to slow more quickly in Q2 than envisaged at the time of its February Monetary Policy Report, as wage growth eases and energy price rises from 2022 drop out of the annual comparison, chief economist Huw Pill told a livestreamed MNI Connect event on Thursday.

However, recent data releases serve as a reminder that the precise path of inflation may be bumpier than policymakers expect, Pill warned.

On broader themes, Pill said the Monetary Policy Committee remains vigilant to signs of tightening financial conditions and will be prepared to respond to any credit market dislocation with implications for the inflation outlook.

He noted that UK pay growth has eased, despite continued labour market tightness, evidenced by indicators of earnings across the whole economy and private sector. Moreover, high frequency indicators of momentum in wage developments appear to be easing, he added. (See MNI INTERVIEW: UK Pay Awards Likely Peaked In Q1)

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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