BoE’s Pill: We still think there is more to do on inflation pressures
04.11.2022, 08:41

BoE’s Pill: We still think there is more to do on inflation pressures

The Bank of England (BoE) Chief Economist Huw Pill said on Friday, “we still think there is more to do on inflation pressures.”

Additional quotes

It is not for us to tell markets how to price assets.

Trying to re-anchor our thinking, and communication after recent events in the UK.

The challenge is to set policy such that economic slowdown is sufficient to ensure inflation is consistent with the target and also avoid overshoot in the other direction.

Pricing during period of turmoil showed bank rate going a little bit too far in one direction.

We think lags in transmission of monetary policy to activity is about a year.

Our target is not on the real side of the economy, our target is 2% inflation.

Slowdown in economy is what we think is needed to contain domestic inflation pressures.

We are seeking to find balance of returning to 2% inflation without generating unnecessary problems in economy.

We need to raise bank rate and shrink QT portfolio - recent disturbances have not distracted us from key goal. 

Market reaction

Pill’s comments have little to no impact on the Pound Sterling, as GBPUSD is keeping its range around 1.1215, adding 0.43% on the day.

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