October 22 (Reuters) – Inflation in Britain could exceed a “very uncomfortable” rate of 5%, said Bank of England’s new chief economist Hu Pill and questioned whether to raise interest rates at its meeting in early November. topical”, the Financial Times (FT) reported.
Hugh Pill told the newspaper in an interview published on Thursday that the Bank of England’s (BOE) monetary policy committee’s decision was “very balanced”.
Financial markets on November 4 predicted an increase of 15 basis points by the BoE, which will become the first central bank in the world to raise borrowing costs since the coronavirus pandemic in early 2020.
The BoE previously said that inflation is likely to exceed 4% and that since that forecast, energy prices have risen further. Furthermore, the UK economy is on the verge of regaining its pre-pandemic levels, although the pace of recovery has slowed.
“The big picture is, I think, there are reasons why we don’t need the emergency parameters of politics that we saw after the epidemic intensified,” Hu said. bullet on ft.
But the newspaper quoted him as suggesting that rates would not need to be much higher than their pre-pandemic level of 0.75%.
“Given the transient nature of what we see in terms of inflation in our baseline scenario, we do not see the need for a restrictive (political) stance,” he said.
BoE Governor Andrew Bailey also said on Sunday that the rise in inflation was still likely to prove temporary, but that the UK central bank must act to contain the risks.
Hu Pill told the FT that they haven’t seen any increase in wages so far which could lead to inflationary concerns.
(Reports by William Schomberg and Aakriti Bhalla; French edition Camille Raynaud)
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