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April 12, 2024

BoE’s Pill: Weak UK activity isn’t putting much downside pressure on inflation

BoE’s Pill: Weak UK activity isn’t putting much downside pressure on inflation

Bank of England (BoE) Chief Economist and Monetary Policy Committee (MPC) member Huw Pill gave talking points while participating in a panel discussion at the Annual National Association for Business Economics Economic Policy Conference, in Washington DC late Friday. 

The panel discussion is titled “Perspectives on Global Monetary Policy”.

Key highlights

  • BoE has good news on headline inflation, but needs to take a look at persistent components.
  • UK labor market remains tight, driven by both weak supply and strong demand.
  • The economic situation in the UK looks “a little less benign” than in the US.
  • Services inflation in particular remains a reason for concern.
  • Only modest evidence of a reversion in inflation.
  • Recession is not necessarily forcing down inflation.
  • Plenty of reasons for caution over trajectory of inflation, need to see further easing of wage pressures.
  • BoE will need several months of data before being convinced persistent inflation is gone.

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