MNI BRIEF: BOE Pill Worried About Upside Inflation Risks

Bank of England Chief Economist Huw Pill said Tuesday he was worried not only about the upside inflation risks embedded in the upside economic scenario but also structural change that could result in persistently elevated inflation.

Pill, who voted against May's 25 basis point rate cut, was speaking at an LSE event and made clear that he has deep lying concerns about the risk of inflation overshooting target, which suggests his cautious approach to easing may persist.

He cited the risk of structural change in price and wage setting behavior and "real income resistance" which would entail that a stronger monetary policy response would be needed to get inflation back to target following any new inflationary shock.