Business

The BoE Chief Economist said:

The Bank of England chief economist said on Tuesday the UK government’s easing of fiscal policy “will require a substantial monetary response”, signaling that the central bank is not Expect to act before the next scheduled meeting in November.

Speaking at a conference in London a day after sterling hit an all-time low against the dollar, Huw Pill said the monetary policy committee was “certainly not indifferent” to the revaluation. assets seen since last week, when prime minister Kwasi Kwarteng laid out a “Growth Plan” focused on major, non-refundable tax cuts.

He highlighted the combined impact of the government’s new fiscal stance, the “significant” reaction in markets and the broader backdrop of rate hikes elsewhere in the world. “All of this will require a significant monetary response,” he said.

But he rejected calls from some investors for an emergency rate hike to strengthen the currency and restore confidence in the UK’s macroeconomic outlook.

Market movements will have to be seen in light of other recent developments, including fiscal policy, as well as energy and labor markets, he said. The best way to do a “necessarily comprehensive review,” he said, is when the BoE updates its forecasts to inform its November policy decision.

“In my view, the combination of financial announcements we’ve seen should act as a demand stimulus,” Pill said, stressing that this isn’t necessarily possible. represent the views of eight other MPC members.

While the government is focused on generating growth, the BoE is concerned about persistent inflation and is willing to raise interest rates to curb demand and slow price gains.

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