BoE's Pill: I genuinely don't know how I will vote in December

BoE Chief Economist Huw Pill said on Friday that he genuinely does not yet know how he is going to vote at the December monetary policy meeting. For reference, markets are fully priced for the BoE to implement a 15bps rate hike to 0.25%. Pill added that the direction of travel for interest rates over the medium-term is pretty clear (i.e. hinting strongly that the BoE will be hiking over the next 12 months), but that the long-term outlook for rates is too uncertain to give a specific forecast three of five years ahead.  

Additional remarks 

“It does matter if markets misunderstand BoE, but maybe less than markets think.”

“The BoE should not get caught up in minute-by-minute market and media-driven dynamics, should instead focus on the medium-term”.

“The BoE wants to train people to think the right way about monetary policy.”

“The past few weeks have not been a good example of a common understanding of monetary policy between the BoE and markets.”

“No policymaker wants to create unnecessary volatility.”

“The BoE should not artificially suppress volatility caused by genuine uncertainty.”

“Two-sided risks make communication more complex than in the past.”

“Fed-style dot plots would probably add to confusion in BoE communications.”

“The direction of travel for interest rates over the medium-term is pretty clear”.

“The long-term outlook for rates is too uncertain to give a specific forecast 3 or 5 years ahead.”

Market Reaction

GBP did not react to these latest remarks from BoE's Pill.