“While further cuts in Bank Rate remain in prospect should the economic and inflation outlook evolve broadly as expected, it will be important to guard against the risk of cutting rates either too far or too fast,” Pill said in a speech on Friday at the Institute of Chartered Accountants in England and Wales.
“For me, the need for such caution points to a gradual withdrawal of monetary policy restriction.”
The BoE’s Monetary Policy Committee is expected to cut interest rates at its next meeting in November after its first cut in more than four years in August and a pause in September.
Bailey told the Guardian newspaper in an interview published on Thursday that the central bank could move more aggressively to cut interest rates if there was further welcome news on inflation.
Sterling, which fell sharply after Bailey’s comments, rose by as much as a fifth of a cent against the U.S. dollar when Pill’s speech was published.
He said he remained concerned about the possibility of structural changes in Britain’s economy that could sustain inflation pressures and there was “ample reason” for caution in assessing how quickly that persistence would lift.
Pill also said in the text of the speech that inflation among services firms and pay growth represented “a continued source of concern.”
In the comments he made at the event, he said: “I am worried about inflation more than in the MPC published forecasts.”
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