The Bank of England’s new chief economist has cast doubt on the likelihood of a rise in interest rates before Christmas.
Huw Pill, who took over from Andy Haldane this summer, said there was a growing need to take action to bring inflation back under control.
But he said there was no guarantee that such a move would come next month, adding: ‘I genuinely do not know today how I will vote.’
Chief economist at The Bank of England, pictured in 2015, Huw Pill said there was a growing need to take action to bring inflation back under control
Speaking at an economics conference in Bristol yesterday, Mr Pill admitted that he was ‘looking perhaps for reasons not to hike rates’.
And he warned that interest rate rises – when they come – may be steeper than expected.
It had been assumed rates would rise to 0.25 per cent and then go up by 25 so-called ‘basis points’ thereafter – such as from 0.25 per cent to 0.5 per cent.
The Bank defied expectations earlier this month by refusing to hike rates from their current record low of 0.1 per cent to 0.25 per cent. Pictured: The Bank of England as seen in October (file photo)
But Mr Pill said: ‘I don’t want to give an impression that there is a piece of data that will come out, and I will look at that and say, “OK, it’s zero or 50 or 25 or 40 basis points”, or whatever.
‘There is an attraction at some point to getting back to a multiple of 0.25, but we are not under pressure to do that immediately.’
His comments came as households across the country face a cost-of-living crisis.
Prices are rising at such a fast pace that inflation has hit 4.2 per cent – its highest level for a decade.
It has sparked speculation that the Bank of England will raise interest rates imminently to bring the cost of living back under control.
But while higher interest rates are typically used to curb inflation, they also make mortgages and other loans more expensive.
Households also face higher taxes, with several hikes due in April, including a rise in national insurance to pay for extra spending on health and social care.
The Bank defied expectations earlier this month by refusing to hike rates from their current record low of 0.1 per cent to 0.25 per cent.
The ONS said the rate of Consumer Price Index inflation increased to 4.2 per cent in October from 3.1 per cent in September
The cost of servicing Britain’s towering national debt more than tripled last month as inflation sent interest payments soaring.
In a bleak report, the Office for National Statistics said the Government spent £5.6 billion on debt interest in October alone.
That amounted to £180 million a day and was more than 200 per cent higher than the £1.8 billion spent servicing the debt in October last year.
The national debt has ballooned to nearly £2.28 trillion, or 95.1 per cent of gross domestic product – a level not seen since the early 1960s.