BoE's Pill: Inflation pressures are likely to be more persistent
17.12.2021, 09:57

BoE's Pill: Inflation pressures are likely to be more persistent

In an interview with CNBC on Friday, Bank of England Chief Economist Huw Pill said domestically generated inflation pressures were likely to be more persistent. When asked about more rates hikes to come, "I think that's true," Pill responded, per Reuters.

Additional takeaways

"To ensure credibility of our inflation target, we felt time had come to act."

"We signalled in November that we were steering towards a rate increase because of tight labour market."

"Data we have seen has confirmed that labour market is tighter than we expected in November."

"Omicron has introduced new level of uncertainty."

"We need to move forward cautiously."

"We need to see if omicron leads to some reversal of labour market strength."

"We do see evidence of slowdown notably in consumer-facing sector."

"Omicron may weigh on activity in short term but we must be cautious about assuming it will be disinflationary over the medium term."

"Domestically generated inflation pressures must be contained."

"I am very uncomfortable about headline inflation prints but we must look at longer-term."

"We are very concerned about how our measures announced yesterday and what might be in future transmit through to the economy."

"We haven't used interest rate increases for quite a long time."

"Bond yields should rise as growth expectations recover."

"I don't think magnitude of rate hike yesterday will be transformative for housing market."

Market reaction

The GBP/USD pair showed no immediate reaction to these remarks and was last seen trading flat on the day near 1.3320.

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