Proactive Investors - Bank of England chief economist Huw Pill has expressed caution over cutting interest rates too quickly in contrast with comments from governor Andrew Bailey earlier this week.
After Bailey signalled on Thursday that the central bank could move “more aggressively” in cutting rates, Pill said on Friday that there was “ample reason for caution”.
“Further cuts in Bank Rate remain in prospect should the economic and inflation outlook evolve broadly as expected,” Pill told the Institute of Chartered Accountants for England and Wales
However, “it will be important to guard against the risk of cutting rates either too far or too fast,” he added.
“For me, the need for such caution points to a gradual withdrawal of monetary policy restriction.”
Bailey’s comments, where he also said the bank could become “a bit more activist,” saw the pound stoop to a three-year low against the dollar as traders priced in a move away from a cautious rate-cutting cycle, after August's initial 0.25% reduction.
Pill had been among one of four Monetary Policy Committee members to vote against August's cut, which was followed by an unchanged rate in September’s meeting.
The pound regained against the dollar on Friday following the news, ticking up 0.25% to US$1.3157.