BoE's Pill argues against too quick pace of rate cuts

The Bank of England's chief economist cautioned against expectations for a quick a pace of interest rate cuts.

In an online presentation organised by the BoE, Huw Pill said that the inflation fight was not yet won and warned against complacency.

"We are not yet comfortable that we are out of the woods in managing the inflationary pressures that emerged with the pandemic with the [Ukraine] invasion, and have been perpetuated by the tightness in the UK labor market, amongst other things. But we do think we are making progress," he said.

Pill emphasised the "persistent" component of certain dynamics in the UK economy that argued in favour of being cautious.

The economist was referring to changes in the UK jobs market and in the mechanisms for setting wages and prices.

He was among the four members of the Monetary Policy Committee who just the day before had voted in favour of keeping Bank Rate on hold, instead of a reduction.

Yet while the country was not yet "out of the woods", progress was being made on tackling inflation, he said.

Public sector pay rises announced by the Chancellor above inflation did not pose a big risk, Pill added.