Bank of England Chief Economist Huw Pill said UK inflation is likely to drop sharply this year despite a “material upside surprise” reported last month.
(Bloomberg) — Bank of England Chief Economist Huw Pill said UK inflation is likely to drop sharply this year despite a “material upside surprise” reported last month.
“Recent releases serve as a reminder that the precise path of inflation may be bumpier than we expect,” Pill said in the text of a speech released by the BOE in London on Thursday.
The remarks are in step with Pill’s previous assertion that he doesn’t intend to guide markets on the central bank’s next decision because policy makers will make up their mind based on the data. After the quickest series of interest rate rises in three decades, BOE officials are now weighing whether to slow or pause that tightening.
Pill also said:
- Officials are seeing some signs of tighter financial conditions
- Wage growth is likely to slow in the months ahead and continue slowing for some time.
- Data from purchasing managers suggest some room for employment growth, but other indicators imply greater uncertainty.
- The BOE still expects gross domestic product to drop 0.1% in the first quarter despite figures released earlier Thursday that show no growth in February and stronger output in January.
–With assistance from Elina Ganatra and Andrew Atkinson.
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