coinmaster20freespins| Bank of England chief economist "Eagle turns dove": Summer interest rate cuts are just around the corner
Huw Pill, chief economist of the Bank of England, saidCoinmaster20freespinsThe summer interest rate cut is on the agenda, butCoinmaster20freespinsHe cautioned that "there is still some work to be done" to curb inflationary pressures in the UK.
Pierre said the Bank of England has set a "ceiling" on basic inflation measures, and it is reasonable to speculate that the MPC will consider cutting interest rates in the summer.
Speaking at an event at the Institute of Chartered Accountants in England and Wales, he warned that policies needed to be kept within limits to control price pressures, but added that even if interest rates were cut, they could still curb inflation.
His remarks suggested that the Bank of England tended to cut interest rates cautiously at its upcoming meetings in June and August as more signs emerged on Tuesday that the UK labour market was cooling. Investors are watching Pierre's comments closely because some economists believe that Pierre is more cautious than President Andrew Bailey and Vice President Dave Ramsden.
The pound fell and gilts rebounded after the comments. Money markets raised their bets on monetary easing, setting the possibility of a June rate cut at 50 per cent and fully pricing a 25 basis point cut in August. While it is still possible for the Bank of England to cut interest rates twice by the end of the year, the possibility of a third rate cut has risen from about 10 per cent last week to nearly 1/3. The pound fell as much as 0% on Tuesday.Coinmaster20freespins.4% to 1Coinmaster20freespins.2512 US dollars, lagging behind all other currencies of the G10 group.
"We have reason to believe that we will have enough confidence in a sustained decline in the summer to consider [lower] bank interest rates," Pierre said. It is important to recognize that bank interest rates can be cut while still retaining some restrictions in the system. "
His comments followed data earlier on Tuesday showing a broad easing of inflationary pressures in the labour market, with unemployment climbing to its highest level since last summer and private sector wage growth slowing. Unemployment per vacant job, an indicator closely watched by the Bank of England, rose to its highest level since 2021.
In addition, Pierre noted that there was "good news" in reducing inflation, which the Bank of England expects to be close to its 2 per cent target in the second quarter.
However, he cautioned that given the tight labour market and rapid wage growth, "there is still some way to go" to keep price growth at the target level.
Pierre stressed the importance of releasing two rounds of inflation data and another employment data before the next meeting of the monetary policy committee in June. "I think the committee will evaluate these data very carefully," he said. "
Kirstine Kundby Nielsen, a strategist at Danske Bank, said: "in the past few weeks, Pierre has been more hawkish than other insiders, so the market is watching his comments closely. Summer interest rate cuts seem to be basic, but the question is whether it will be in June or August. We insist that it is June. "
