High inflation "still requires tighter monetary policy", MPC member says
Inflation is "uncomfortably high" and "acting to achieve the MPC’s 2% inflation target is now more important than ever", according to Huw Pill, chief economist and executive director for monetary analysis.
Pill predicts that high inflation "still requires tighter monetary policy", noting that since he joined the MPC last September, the Committee has raised Bank Rate cumulatively by more than one percentage point to 1.25%.
He said Committee members are "now considering whether to start selling gilts, as well as implementing further interest rate increases".
Pill added: "The MPC has taken the view that monetary tightening has been required to ensure that inflation returns to target. I would anticipate that we will see more policy tightening ahead."
The MPC recently emphasised its "preparedness to act forcefully, if necessary, to indications of more persistent inflationary pressures".
In response, Huw Pill said: "At least on my part, this statement reflects a willingness – should circumstances require – to adopt a faster pace of tightening than we have seen implemented in this interest rate cycle so far."
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