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The Markets
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The Markets
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Proactive UK has moved.
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Banks

UK has 'some way to go' before rate cuts, says BoE chief economist

The Bank of England's chief economist Huw Pill believes the UK still has "some way to go" before he feels confident in voting in favour of cutting interest rates.

"While I recognise that we are now seeing early signs of a downward shift in the persistent component of inflation dynamics, those signs thus far remain tentative," Pill said in a speech on Friday.

"In my view, we have some way to go before such evidence becomes conclusive."

Pill also believes rates don't have to stay at 5.25% for the Bank of England to slow inflation.

"Maintaining restrictiveness does not necessarily mean leaving Bank Rate unchanged," he added.

"For one thing, real interest rates – which may be more relevant for some economic decisions and thus for the transmission of monetary policy – will rise as inflation and shorter-term inflation expectations ease.

"The MPC will need to take this into account in setting Bank Rate. And what’s more the overall monetary policy stance can remain restrictive – even if less so than previously – even after a Bank Rate cut."

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