# Bank of England still needs to ‘see the job through’ on inflation: Pill Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-04-04 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: Bank of England Chief Economist Huw Pill on Interest Rates Meta Description: Bank of England Chief Economist Huw Pill raises concerns about inflation risks and the need for sustained monetary tightening to control inflation in the UK URL: https://financedigest.com/bank-of-england-still-needs-to-see-the-job-through-on-inflation-pillhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-04-04t144733z1lynxmpej330m4rtroptp4britain-boe-1736814196047-compressed.jpg) By David Milliken LONDON (Reuters) -Britain’s central bank still cannot be sure that it has raised interest rates enough to tame inflation, although significant past tightening should soon bear down on the economy, Bank of England Chief Economist Huw Pill said on Tuesday. “On balance the onus remains on ensuring enough monetary tightening is delivered to ‘see the job through’ and sustainably return inflation to target,” Pill said in remarks published by the BoE, ahead of a speech he was due to deliver in Geneva. Pill voted with the majority on the BoE’s Monetary Policy Committee last month to [raise the BoE’s main interest rate](https://www.financedigest.com/european-central-bank-to-raise-deposit-rate-to-3-25-by-mid-year-reuters-poll.html "European Central Bank to raise deposit rate to 3.25% by mid-year: Reuters poll") to 4.25% from 4%, its 11th rate rise since starting to increase rates in December 2021. Pill previously talked in February about how it was “critical” for the BoE to [see through its task of raising interest rates to control inflation](https://www.financedigest.com/britains-next-sees-lower-clothing-inflation-shares-dip-on-cautious-outlook.html "Britain’s Next sees lower clothing inflation, shares dip on cautious outlook"). His rate view contrasts with that of colleague Silvana Tenreyro, who said at a separate event on Tuesday that the rapid pace of tightening meant the [BoE might have to cut rates](https://www.financedigest.com/boe-raises-rates-again-as-investors-look-towards-end-of-hikes.html "BoE raises rates again as investors look towards end of hikes") “earlier and faster. Pill said he could not [offer guidance on how he would vote at the BoE’s next rate](https://www.financedigest.com/credit-suisse-offers-higher-deposit-rates-in-asia-to-woo-the-wealthy-sources.html "Credit Suisse offers higher deposit rates in Asia to woo the wealthy – sources") decision on May 11. Financial [markets see a 70% chance of another quarter-point rate](https://www.financedigest.com/no-santa-rally-for-markets-as-central-banks-dampen-peak-rate-hopes.html "No Santa rally for markets as central banks dampen peak rate hopes") increase then. Although headline inflation is set to fall significantly in the course of this year owing to a combination of base effects and [falls in energy prices](https://www.financedigest.com/buy-off-plan-to-beat-stalling-house-prices-and-falling-rental-yields-says-jean-liggett.html "“Buy off-plan to beat stalling house prices and falling rental yields” says Jean Liggett "), caution is still needed in assessing inflation prospects on account of the potential persistence of domestically generated inflation,” he said. British consumer [price inflation](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc.html "UK shop price inflation hits record 8% in January: BRC") peaked at 11.1% in October, a 41-year high, and was still above 10% in February. The BoE [forecasts it will fall sharply during the current](https://www.financedigest.com/sea-bream-market-2021-current-and-future-demand-analysis-growth-and-forecast-by-2029-report.html "Sea Bream Market 2021 | Current and Future Demand, Analysis, Growth and Forecast By 2029, Report") quarter and that it will be below 4% by the end of this year. Both Pill and Tenreyro said the prospects for a sharp [fall in inflation](https://www.financedigest.com/boes-mann-falling-headline-inflation-high-core-make-policy-difficult.html "BoE’s Mann: Falling headline inflation, high core, make policy difficult") looked stronger than they did a few months ago, thanks to a slowdown in some of the most recent measures of private-sector wage growth and lower oil and gas prices. “Relative to where we were … the difficult ‘trade-off’ facing monetary policy as a result of the adverse terms of trade shock – that is to say, [rising inflation](https://www.financedigest.com/oil-rises-about-2-with-u-s-and-china-inflation-in-focus.html "Oil rises about 2% with U.S. and China inflation in focus") in concert with a squeeze on domestic real incomes and spending – has eased,” Pill said. However, there was a risk that the improvement in domestic demand and employment prospects was not matched by the economy’s supply capacity, creating ongoing [inflation risks](https://www.financedigest.com/inflation-trumps-financial-risks-as-central-bank-tightening-set-to-continue.html "Inflation trumps financial risks as central bank tightening set to continue"), he added. “The MPC will need to exercise its judgement about which of these two underlying stories is more relevant,” Pill said. (Reporting by David MillikenEditing by William Schomberg) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---