MNI BRIEF: BOE Pill Says QT Delays 'Insignificant'

Bank of England Chief Economist Huw Pill said Wednesday that quantitative tightening is a long-term process and postponing it in response to market conditions could be justifiable and does not matter in the bigger picture.

The BOE delayed asset sales during the chaotic aftermath of the September 2022 Budget and postponed a sale of long-dated gilts earlier this month, selling shorter-dated paper instead. In a Q and A at Leeds University Pill said that for QT it does not matter if asset sales are done one week or the next as "it's a much more ... gradual, long term process."  The Bank is alive to the state contingent nature of QT and market conditions Pill said, implicitly leaving the door open to further delays to QT.

In other remarks Pill said a hot topic for the Bank given recent market turbulence was whether quantitative easing should be tightly targeted -- which he likened to using it as a scalpel -- or broad based. "There may be challenges to the stability of institutional institutions, whether we act as a scalpel or whether we act as a sledgehammer I think will become a very important question," he said.