‘Significant monetary policy response’ to come, Bank of England chief economist says

The Bank of England’s chief economist has said the government’s mini-budget, which led to the pound falling to a record low against the dollar, will require “a significant monetary policy response”.

Speaking at the International Monetary Policy Forum, Huw Pill reasserted the Bank of England’s willingness to act to rein in inflation.

“I think it’s hard not to draw the conclusion that all this will require a significant monetary policy response. Let me leave it there,” he said.

There will be “challenging times” to bring inflation back to the regulator’s 2% target, Mr Pill said.

Recent market conditions have created “additional challenges”, he added.

The government’s mini-budget last Friday will act as a stimulus to the economy, he said.

Mr Pill described Monday’s announcement from the Treasury, which committed to a further, costed fiscal announcement in November with the oversight of the Office of Budget Responsibility and a spring budget, as “helpful”.

More on Bank Of England

The pound rose 0.85% in response to the announcement.

Mr Pill has been the Bank’s chief economist since last September and has consistently voted in line with Andrew Bailey, the governor, and the Monetary Policy Committee as a whole on their interest rate decisions.

The Bank asserted yesterday that it is happy to push the brake on the economy by raising interest rates while the government presses the accelerator by cutting taxes.

Articles You May Like

Hear what the Walmart shooter told this survivor
Inflation-busting pay rises for public sector workers ‘unaffordable’, says minister
Ukraine War: How are Russian missile strikes affecting Ukraine’s energy supply?
The G-7 may cap Russia’s oil price — but it won’t dent Moscow’s war chest, analysts say
Energy support scheme cash potentially at risk as gas boss warns more suppliers could go bust