BOE likely to raise rates further in 2027, Pill tells FT
Huw Pill said the central bank will likely need more tightening as inflation is projected to rise to around 5% next year, the Financial Times reported.
- On Saturday, Bank of England Chief Economist Huw Pill told the Financial Times that the central bank will likely need to raise interest rates further in 2027 to combat inflation, exceeding the anticipated December increase.
- The US-Israeli conflict with Iran is driving inflation through second-round wage effects, Pill noted, adding he considers a near-term end to the conflict and falling energy prices to be a "very low probability."
- Markets currently price in 90 basis points of tightening, suggesting rates could reach 5%, while the BoE aims to return inflation to 2% over time despite expecting inflation to reach around 5% by mid-2027.
- Pill announced he will not seek a third term as chief economist when his tenure ends in September 2027, while supporting another quarter-point hike next month and stating, "The ability to be modest has diminished."
- Emphasizing that the central bank should have acted sooner, Pill warned that further rises are necessary to address risks from second-round effects. He stated, "My bias, for what it's worth, is that I worry about the inflationary impact.
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Bank of England Signals More Interest Rate Rises
Independent Journalism and Public Interest Reporting. Millions of UK homeowners could face higher mortgage payments in 2027 as the Bank of England’s chief economist warns that further interest rate increases may be needed to bring inflation under control. Around 2.3 million households are expected to come off fixed-rate mortgage deals next year, increasing concerns about affordability as borrowing costs rise. UK [...] This article was originally…
BOE likely to raise rates further in 2027, Pill tells FT
The Bank of England will probably need to raise interest rates further in 2027, over and above an increase at the next meeting in December, to combat inflation, Bank of England Chief Economist Huw Pill told the Financial Times in an interview published on Saturday.
Bank of England signals further rate rises into 2027
The Bank of England is expected to raise interest rates in December and potentially into early 2027, according to chief economist Huw Pill. The signalled increases are expected to result in higher mortgage payments for approximately 2.3 million homeowners who will need to refinance their loans next year.
Interest rate rises likely in coming months, Bank of England’s chief economist says
The Bank of England will probably need to raise interest rates next month and again in early 2027 to combat rising inflation, its chief economist has said. Signalling a sharp rise in mortgage payments for an estimated 2.3 million homeowners who will have to refinance their loans next year, Huw Pill said that while the […]
Hugh Bell, the central bank's chief economist, said that the bank was likely to continue raising interest rates over the next year along with the expected increase at its next meeting in December, in order to cope with increasing inflationary pressures. The Bank's recent 4% increase in interest rates from 3.75% was an important step, but it would not be enough to contain inflation, [...] the big economist of the Bank of England: raising interest…
Markets are currently discounting a cumulative tightening of monetary policy of 90 basis points by the end of 2027.
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