Top Bank of England economist in inflation warning

The Bank of England’s chief economist yesterday delivered a blow to rate cut hopes.

Huw Pill warned people not to draw too much comfort from the fall in inflation.

The Bank said this week it expects inflation to drop to its 2 per cent target by April – described as ‘good news’ by governor Andrew Bailey.

It prompted markets to ramp up bets that interest rates will be cut this spring.

Warning: Huw Pill warned people not to draw too much comfort from the fall in inflation

But speaking to businesses yesterday, Pill said ‘there is a risk that we draw too much comfort’ from the expected fall in inflation, which will largely be driven by one-off factors such as measures announced in the Budget to bring down energy bills.

The Bank is split over interest rates and voted by a five to four majority on Thursday to leave them at 3.75 per cent –with the minority voting for a cut.