Published 17:47 IST, April 23rd 2024

Bank of England economist cautious on rate cuts

Acknowledging that time and minimal economic developments have nudged rate cuts closer, Pill cautioned against hasty action.

Reported by: Business Desk
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Huw Pill | Image: Reuters

BoE rate cuts: Bank of England Chief Economist Huw Pill emphasised on Tuesday that despite recent shifts in economic indicators, interest rate cuts may still be distant. Pill's remarks underscored a cautious stance, highlighting the risks associated with precipitous rate reductions.

While acknowledging that time and minimal economic developments have nudged rate cuts closer, Pill cautioned against hasty action, citing greater risks in cutting rates prematurely. His remarks coincided with a decline in market expectations of imminent rate cuts, with the BoE's August meeting no longer fully priced for such a move.


"The combination of limited new information and the passage of time have brought the prospect of a bank rate cut somewhat closer," Pill stated during a speech at the University of Chicago Booth School of Business. However, he maintained the stance established on March 1, emphasising the need for prudence.

Pill's moderate position aligns with his view of maintaining a restrained approach, despite the recent easing in headline inflation figures. He pointed to current business surveys as reinforcing his outlook, noting a modest but observable uptick in economic growth following the technical recession in the latter half of the previous year.


"Economic growth in the UK has resumed, albeit modestly, over the past few months, following the technical recession experienced in the second half of last year. Today's survey data certainly supports that view," Pill affirmed.

Pill's cautious stance suggests a measured approach to monetary policy, emphasising the importance of balancing economic indicators with potential risks in determining future rate adjustments.


(with Reuters inputs)

17:45 IST, April 23rd 2024