BoE pills see expanding cases of rate hikes in December, but no guarantee

Bristol, UK — Hupil, chief economist at the Bank of England, said the weight of evidence is shifting towards rising interest rates next month, but he hasn’t made a decision and the market has focused on the longer term. I said it was better.

Pill told reporters at an economic conference in Bristol against the broad assumption that the BoE’s first policy action would raise interest rates by 15 basis points to 0.25% as it accepted other options. Also warned.

Following Governor Andrew Bailey’s comments in late October, the BoE has stagnated many investors this month as it did not raise interest rates from its all-time low of 0.1%. The market interpreted it as indicating that interest rate hikes are very close.

Since then, inflation has risen to a 10-year high of 4.2%, and unemployment data do not show an increase in unemployment after the end of the layoff system. This is an important concern that remained in the hands of the BoE earlier this month.

Further unemployment data will come before the next meeting of the BoE on 16 December.

“The burden of proof is probably a bit in the opposite direction … so now I’m probably looking for a reason not to raise rates,” he said.

Two of the BoE’s policy makers voted to raise interest rates to 0.25 percent this month. Whenever it came, asked if it was safe to assume that this was the first tightening step on the BoE, Pill said he could not confirm this.

“This reflects true uncertainty at the individual level and we would like to see how we assess the situation,” he added, adding that interest rates could rise further.

He added that while raising interest rates to multiples of 0.25% was convenient, there was no urgency to do so if different scales of tightening proved appropriate.

Pill previously said that attending the BoE in September is a “quite unpleasant time”, with inflation already well above the target of 2% and expected to reach about 5% next year. Said.

“There is no quick solution. The lack of a quick solution means that some patience is required,” said Pill, an economic observatory and economic festival that conveys economic research. I told the hosting conference.

Pill said policy communication is becoming more complex due to the two-sided risk to growth and inflation, as opposed to the serious downside risks of COVID-19 during a pandemic.

Former Goldman Sachs economist Pill wanted the BoE to “train” the market to focus on medium-term outlook and double-sided risk, but the exact timing of interest rate hikes is uncertain. Therefore, he said that some volatility was unavoidable.

“If we can generate true understanding, we can eliminate unnecessary volatility, but it is also important not to try to curb artificial volatility that reflects the true uncertainty of the economy,” he said. He added that he had “true uncertainty” about how to vote in December.

David Milliken