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The Bank of England’s chief economist has warned that interest rates should not be cut “too far or too fast.”
Huw Pill suggested they should cut gradually due to inflation remaining above 2.2% and is predicted to rise to 2.5% by Christmas.
On Thursday the Bank’s governor Andrew Bailey said that “more aggressive” cuts to interest rates could happen.
During an interview with The Guardian Bailer said if inflation remains low then the bank could reduce borrowing costs.
On Friday Pill said, “At present, there is ample reason for caution in assessing the dissipation of inflation persistence.
“While further cuts in Bank Rate remain in prospect should the economic and inflation outlook evolve broadly as expected, it will be important to guard against the risk of cutting rates either too far or too fast.
“For me, the need for such caution points to a gradual withdrawal of monetary policy restriction.”
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