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5d ago

Bank of England Economist Warns Rate Cuts Are Proceeding Too Quickly

Huw Pill advocates for pausing further interest rate reductions, citing persistent inflation risks despite recent disinflation progress.

Chief Economist and Executive Director for Monetary Analysis and Research at the Bank of England Huw Pill looks on during an interview with Reuters at the Bank of England in London, Britain, February 12, 2025. REUTERS/Suzanne Plunkett/ File Photo
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Huw Pill, chief economist at the Bank of England, was one of two MPC members to vote for a hold at May’s meeting

Overview

  • Huw Pill, Chief Economist at the Bank of England, stated that the quarterly pace of 25 basis point rate cuts since mid-2024 has been 'too rapid.'
  • The Bank of England reduced its base rate to 4.25% on May 8, 2025, in a split Monetary Policy Committee vote, with Pill dissenting in favor of a temporary pause.
  • Pill described his dissenting vote as a 'skip' rather than a halt to easing, emphasizing the need for continued caution until inflation is fully under control.
  • He expressed concerns about persistent inflationary pressures, particularly structural changes in wage and price-setting behaviors that could prolong inflation.
  • The Bank's recent use of economic scenarios was highlighted by Pill as a valuable tool for addressing risks beyond the central inflation forecast.