A Landbay poll showed that most brokers (82%) disagree with Huw Pill’s comment that interest rates fell too quickly.
In a poll, professional buy-in lender lenders asked the mortgage intermediary to agree with the Pills of the Bank of England chief economist, i.e. interest rates fell “too fast.”
It turned out that only 13% said they agreed to the drug, but 82% said they disagreed and 5% said they were unsure.
Pills warn Bank of England to slow down too fastand argued that given the durability of inflation, its policy makers should remain at the same level.
Pill took over as Chief Economist of the Bank of England for Andy Haldane in 2021, executive director of currency analysis and research, and a member of the Monetary Policy Committee (MPC).
At a recent meeting at the London School of Economics, the Pill admitted that he was concerned that inflation in the UK might be stronger than expected and that interest rates may need to be higher than investors’ ideas.
He noted that inflation may be difficult to return to the Bank of England’s 2% target, which could “mean a response from monetary policy to ensure we return to the target within a reasonable cycle and therefore need to be more aggressive or persistent in itself”.
Pill says investors should not assume that BOE’s latest forecast (that inflation will return to target based on recent market pricing) – directly endorsing their bets on future tax rates.
He also believes that the increase in wage demand caused by rising prices in the past few years is echoing the inflation crisis.
“I’m still worried that we’ve seen a structural change in price and wage setting behavior, which may be driven by the types of things involved in inflation processes in the 1970s and 1980s,” the pill said.
Today, the National Bureau of Statistics announced Inflation stabilized at 3.4% in May With the market forecast, BOE will hold bank interest rates at today’s MPC conference.
The pills object to the May quarter-point drop to 4.25% after advocating policy makers to “skip” the rate of decline this quarter rather than “stop” the process of completely lowering levels.
BOE’s interest rate announcement is scheduled for noon.
“While central banks have been lowering tax rates, Hughwa Pill has been a cautious voice. He is not alone: both he and Katherine Mann advocate for recent interest rates,” said Rob Stanton, director of sales and distribution at Landbay.
“While the intermediary clearly doesn’t fit his point, the brokers we voted for are not outliers: the majority of MPC’s recent choices reduce a quarter of the point to the most recent 4.25%, while MPC’s peers demand sharper, half-point reductions, including global trade conflicts, including weak economic growth and dangers.”
