MNI BRIEF: "Agile" BOE Can Shift From Gradual Rate Cuts - Pill

Bank of England Chief Economist Huw Pill said Friday that the Monetary Policy Committee was "agile" and was ready to move away from its current baseline of gradual rate cuts if need be.

Speaking at a regional agents briefing Pill, one of two members who voted against cutting the policy rate in May, highlighted the uncertainty around the outlook with the MPC following a "gradual and careful" approach to easing.

Pill said a key driver of the three-way split in the vote in May, with two members backing a 50 bps cut and the majority 25bps, was over labour market tightness and how pay and wage setting would evolve. Labour market " tightness ... remains kind a key question in understanding underlying wage, pay, cost and price pressures, which are our focus," and that while the Bank's view was that the labour market was easing there were "long standing questions about whether, in the aftermath of the pandemic, we have seen some scarring effects."