LONDON (Reuters) -Bank of England Chief Economist Huw Pill said on Friday that inflation pressures were likely to continue weakening, but there was a risk that future rate cuts could be delayed by shifts in longer-term price- and wage-setting behaviour in the economy. “If that’s more the driver of this increase in the upside risk […]
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Bank of England’s Pill sees risks that could slow pace of rate cuts

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LONDON (Reuters) -Bank of England Chief Economist Huw Pill said on Friday that inflation pressures were likely to continue weakening, but there was a risk that future rate cuts could be delayed by shifts in longer-term price- and wage-setting behaviour in the economy.
“If that’s more the driver of this increase in the upside risk to inflation, that might lead us to … have to question whether the pace at which we’re reducing Bank Rate over the last year, a pace of one quarter-point cut every quarter, is that sustainable?,” Pill said in an online briefing to businesses.
“I think that’s kind of where more of the dissenting members focus, the members of the committee who were voting ultimately to hold rates at 4.25% yesterday,” he said.
The BoE cut its benchmark Bank Rate to 4.0% from 4.25% on Thursday but Pill and three other Monetary Policy Committee members favoured keeping rates on hold due to inflation pressures, resulting in an unexpectedly tight 5-4 vote.
The outcome raised the prospect of the BoE slowing its run of rate cuts. Investors are not fully pricing in a next quarter-point reduction before February.
(Reporting by David MillikenWriting by William Schomberg)