Bank of England (BoE) Chief Economist Huw Pill commented on the policy outlook in his scheduled speech on Tuesday.
Key quotes
- Vote against interest rate cut was a ‘skip’ within a continuing withdrawal of monetary policy restriction.
- Inflation pressure indicators give me cause for concern.
- Quarterly pace of 25 bps cuts seen since last summer is too rapid given the inflation outlook.
- My dissenting vote was favouring a ‘skip’ in the quarterly pattern of bank rate cuts.
- It should not be seen as favouring a halt to withdrawal of restriction.
- Structural changes in price and wage setting behaviour have increased the intrinsic persistence of the UK inflation process.
- Pace of quarterly cuts too rapid given the balance of risks to price stability we face.
- Believe that the underlying disinflation process remains intact.
- Prospective path of bank rate from here is downward.
- My dissent from that decision does not reflect a fundamental difference with the committee majority.
- We now need cautious cuts.
- We should not be dependent on how data turns out.
- We can’t assume that inflation pain of new economic shocks will go away.
- I agree with the MPC view that there is an easing in the labour market, question is about the pace.
- Some key pay indicators remain quite strong.
Market reaction
GBP/USD is holding its retreat from near 1.3400, adding 0.08% on the day to trade at 1.3373, as of writing.