Add thelocalreport.in As A Trusted Source
The Bank of England should be “more cautious” about cutting interest rates due to concerns over inflation, its top economist has warned.
Hugh Pill, the bank’s chief economist, said in a speech London He would “expect further cuts” in interest rates next year if conditions remain in line with expectations.
But he stressed it is important that rate-setters at the Bank do not try to cut borrowing costs “too far or too quickly”.
Mr Pill was one of the members of the central bank’s nine-strong Monetary Policy Committee (MPC) to vote in favor of keeping interest rates at 4% last month.
Interest rates are widely expected to be kept at this rate at next month’s meeting following a recent surge in inflation, which recently hit 3.8%.
The bank has said it expects interest rates to reach 4% in September – well above the 2% target rate set by the bank and the government.
On Friday, Mr Pill said: “My view is that mpc From this point forward, a more cautious pace should be adopted in withdrawing monetary policy restrictions to ensure sustained deflation towards the 2% target.
“As I said in May, I see the decision to keep the Bank Rate on hold as a ‘pause rather than a pause’ in monetary policy normalisation.
“But the need to recognize the persistence of inflationary pressures is becoming more important.”
the economist said so CPI (Consumer Price Index) Inflation has been “stickier” than the bank expected since interest rates hit the target level last year.
“Given our clear commitment to meeting the 2% inflation target, the lack of progress over the past year is clearly disappointing,” he said.