Bank of England chief economist Huw Pill noted that based on recent economic developments that there is evidence of support in favor of a rate hike next month. However he has so far not made any decisions and the market is more focused on the long run.
In addition, Pil also stated that he was aware that there was a tendency among policymakers who supported the BOE to raise interest rates by 15 basis points to 0.25%.
This month the BoE has taken a stand not to raise interest rates from their low of 0.1% and at the same time comments from Governor Andrew Bailey at the end of October interpreted that an interest rate hike is imminent.
After that, inflation rose to a 10 -year high of 4.2% and unemployment data did not show higher unemployment despite the termination of the unemployment stimulus package.
Two of the BoE policymakers voted to raise rates to 0.25% this month. Pill on the other hand did not respond as to whether this measure was safe or not. While it is easy to raise interest rates to multiples of 0.25%, there is no urgent need to do so if different tightening scales prove appropriate, he added.
Pill noted the policy linkages became more complicated due to bilateral risks to economic growth and inflation, in contrast to the large downside risks during the Covid-19 pandemic. He prefers to understand the market that focusing on the medium and long term is better for reducing panic.
