Bank of England Chief Economist Pill Doubts Markets Are Right to Price In Four Rate Hikes Over the Next Year

Bank of England Chief Economist Huw Pill pushed back on market expectations for aggressive monetary tightening, saying he is skeptical that four quarter-point rate increases over the next 12 months will be necessary to bring inflation under control. Pill said the size of the policy response now required to tame inflation may not be as large as investors are currently pricing in, suggesting the central bank could move more cautiously than markets anticipate.

The comments are notable because Pill, as the MPC's chief economist, is a closely watched voice on the committee's likely direction. His remarks signal a potential divergence between official thinking and market assumptions, and could prompt traders to reassess rate-path bets that had embedded four successive 25 basis-point hikes into forward curves.