Bank of England Chief Economist Huw Pill cautioned against reading too much into the recent change in language within November’s Monetary Policy Report, saying the central bank’s rate decisions remain finely balanced.
On Thursday, the BoE’s latest policy statement dropped the word “careful” from its previous guidance that the Bank Rate “is likely to continue on a gradual downward path.”
Speaking at a business briefing on Friday, Pill said: “I would caution a little against over-interpreting these linguistic changes.” He added that some observers may have begun to associate the phrase “gradual and careful” with a specific pace of rate reductions, which, in his view, was never formally endorsed by the committee as a whole.
Pill was among the 5-4 majority who voted to keep the Bank Rate unchanged at 4% on Thursday. The decision marked a pause after a series of rate cuts every three months since the start of the easing cycle in August 2024.
Previously, Pill had been a prominent advocate for a more measured and “cautious” pace of rate reductions.
He explained that policymakers remain split between those who believe slowing business activity and rising unemployment will bring inflation below target in the medium term, and others who worry that inflation and wage growth have yet to ease sufficiently, even as the economy weakens.
