BoE's job of containing inflation not yet done, says chief economist

(Sharecast News) - The Bank of England has "some work to do" to get inflation back down to the 2% target, according to the central bank's chief economist on Monday. Speaking at an event by the Official Monetary and Financial Institutions Forum, Huw Pill said recent falls in the inflation rate are "certainly not sufficient" for the BoE to take its foot off the gas.

The annual change in the consumer price index eased to 6.7% in August, down from 6.8% in July and 7.9% in June.

Pill said that policymakers need to continue to have a "persistent response" to price pressures. "If we look at market inflation expectations, we cannot be complacent," he said.

"Of we have a persistent component of inflation, we will need a persistent monetary policy response," he said.

On 21 September, the Monetary Policy Committee voted to hold interest rates steady at 5.25% - the first pause in the rate-hiking cycle since December 2021 - raising hopes that the BoE may have reached the end of monetary tightening.

However, Pill said that the MPC "still have some work to do, in order to get back to 2% [inflation]. "We probably have some work to do, to ensure that when we get back to 2% we do so in a way that is sustainable through time."