Further rate rises likely if inflation persists – BoE’s Pill

by | Dec 17, 2021

Share this article

Image of money

The Bank of England’s chief economist has confirmed that further rate rises would be likely should inflation persist.
On Thursday, the BoE surprised markets when it increased interest rates to 0.25% from 0.1%, on the back of surging inflation. The current rate of inflation in the UK is 5.1%, the highest level since September 2011 and well above the BoE’s 2% target.

Interviewed on CNBC following the move, Huw Pill was asked if there would be “lot more rate hikes to come” if inflation persist.

He replied: “Well I think that’s true.


“Yesterday was the Bank’s response to a view that…underlying, more domestically-generated inflation here in the UK, probably centred around cost and wage pressures in a tight and tightening labour market, are going to prove more persistent through time.”

Pill also acknowledged that it remained unclear if Omicron would increase or dampen inflationary pressures.

“We need to move forward now cautiously, in the sense that we need to assess whether Omicron is going to lead to some reversal of the strength of the dynamics in the economy, and particularly in the labour market, that we have seen over the last six months-plus.”


The Monetary Policy Committee voted by 8 to 1 to increase rates. The BoE now believes inflation will peak at around 6% in April, and markets are pencilling in another increase in the cost of borrowing, to 0.5%, by March.

Share this article

Related articles

UK inflation hits 40-year high of 10.1%

UK inflation hits 40-year high of 10.1%

Higher food prices helped push up inflation in September, official data showed on Wednesday, to a record 10.1%. According to the Office for National Statistics, the consumer price index rose by 10.1% in the 12 months to September, compared to August's rate of 9.9%....

Reports of delay to bond sale ‘inaccurate’ – BoE

Reports of delay to bond sale ‘inaccurate’ – BoE

The Bank of England appeared to deny reports on Tuesday that it wanted to delay selling billions of pounds of government bonds. The central bank acquired £838bn of gilts during its quantitative easing programme. It had intended to start selling them on 6 October, but...

Trending articles

IFA Talk logo

IFA Talk is our flagship podcast, designed to fit perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast - listen to the latest episode