Bank of England Chief Economist Huw Pill said in an interview with The Wall Street Journal (WSJ) on the 13th that stronger-than-expected UK economic growth has reinforced the case for raising interest rates.
Pill voted in favor of a rate hike at the Bank of England’s July Monetary Policy Committee meeting, dissenting against the decision to hold rates steady. In the interview, he said the UK economy’s 0.4% quarter-on-quarter growth in the second quarter suggests the economy is not heading toward a sharp downturn.
The Bank of England held its policy rate steady at the July meeting, but divisions within the committee surfaced as multiple members argued for a rate increase. Pill’s remarks serve to further confirm that hawkish position.
The UK economy continues to face a combination of persistent inflationary pressure and resilient growth. With second-quarter growth exceeding market expectations, there is a growing view that the Bank of England could move toward further monetary tightening.
The Bank of England’s next Monetary Policy Committee meeting is scheduled for September. Market participants view Pill’s comments as a factor that will further fuel expectations for a rate hike.
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