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BOE: Pill is "cautious" regarding future rate cuts; we don't learn a lot more

BOE
Bank of EnglandCentral Bank NewsCEEMEABulletUKMarketsFixed Income BulletsForeign Exchange Bullets
  • Pill has given an interview to Reuters (published overnight) in which he has stated that the MPC needs to move "cautiously" when cutting rates.
  • Note that Governor Bailey in the press conference noted that there had been a debate on the MPC as to whether "careful" or "cautious" would be added to the guidance alongside "gradual" at the February meeting. In the end the Committee agreed on the word "careful" to highlight uncertainty but both Greene (yesterday) and Pill (today) have used "careful" when characterising their personal views. This in itself doesn't necessarily mean that they are the most hawkish on the Committee - as it may be that at least some of Governor Bailey, Breeden and Lombardelli were also in the cautious camp. (These are the five members we expect to vote for Bank Rate on hold in March).
  • "We are able to remove some of the restriction we imposed because of the successful - but not yet complete - process of disinflation."
  • On the Agents' Pay Survey he said that "3.7% I'm not sure is job done."
  • Overall we think that Pill sounded slightly more hawkish in these comments than Greene did yesterday. But the main takeaway is we still expect him to vote for a cut in May and not in March. And after that is too data dependent to really gauge whether he is more hawkish than or his view is in line with Bailey, Breeden and Lombardelli (and Greene).
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  • Pill has given an interview to Reuters (published overnight) in which he has stated that the MPC needs to move "cautiously" when cutting rates.
  • Note that Governor Bailey in the press conference noted that there had been a debate on the MPC as to whether "careful" or "cautious" would be added to the guidance alongside "gradual" at the February meeting. In the end the Committee agreed on the word "careful" to highlight uncertainty but both Greene (yesterday) and Pill (today) have used "careful" when characterising their personal views. This in itself doesn't necessarily mean that they are the most hawkish on the Committee - as it may be that at least some of Governor Bailey, Breeden and Lombardelli were also in the cautious camp. (These are the five members we expect to vote for Bank Rate on hold in March).
  • "We are able to remove some of the restriction we imposed because of the successful - but not yet complete - process of disinflation."
  • On the Agents' Pay Survey he said that "3.7% I'm not sure is job done."
  • Overall we think that Pill sounded slightly more hawkish in these comments than Greene did yesterday. But the main takeaway is we still expect him to vote for a cut in May and not in March. And after that is too data dependent to really gauge whether he is more hawkish than or his view is in line with Bailey, Breeden and Lombardelli (and Greene).