Published by Global Banking & Finance Review®
Posted on September 23, 2025
3 min readLast updated: January 21, 2026
Add as preferred source on GoogleBoE's Huw Pill is now more comfortable with UK inflation risks, citing changes in market repricing and long-term economic factors.
By William Schomberg and Suban Abdulla
(Reuters) -Bank of England Chief Economist Huw Pill, one of the Monetary Policy Committee members who has been most concerned about inflation, said on Tuesday that he was more comfortable with the outlook for price pressures in Britain than he was earlier this year.
"It's always a question of a balance of risks. And you know, I have been on the side of saying maybe the balance of risks are more on the inflationary side than the disinflationary side," Pill said in a discussion organised by the Pictet Research Institute in Geneva.
"I think, through time, and also as markets reprice, that probably is changing. And personally, I'm more comfortable now than I was six, nine, 12 months ago."
Pill voted last week along with the majority of the MPC to keep the BoE's benchmark interest rate at 4% but dissented when the committee cut Bank Rate in August and May.
Britain's inflation rate of 3.8% in August was the highest among the Group of Seven economies and the BoE expects it will peak at 4% in September, double the central bank's 2% target. The BoE thinks inflation will return to 2% only in the spring of 2027.
OECD INCREASES UK INFLATION FORECAST
Earlier on Tuesday, the Organisation for Economic Co-operation and Development raised its forecast for UK inflation this year to 3.5% from a previous forecast of 3.1% and it also pushed up its projection for 2026 to 2.7%.
Pill said long-term factors such as the slow return of workers to the jobs market after the COVID pandemic, Brexit and changes to immigration policy were factors weighing on inflation in Britain.
More recently, tax increases on businesses had also added to price pressures, he said.
"The challenge for monetary policy is to recognize that risk and set policy in the way that reflects that risk," Pill said. "Of course, if you only look at one risk, then you will err on one side rather than the other."
Pill said he voted last week against a slowdown in the pace of the BoE's reduction of its government bond stockpile - amassed under its quantitative easing programme - in part because the central bank has other tools to address problems in financial markets.
"I was essentially a dissenter in summary because I put a higher weight on the need to get out of the QE portfolio a little bit quicker, and I have greater faith that market functioning is perhaps a bit more strong than others," he said.
"I do think we have other tools in order to address concerns about market functioning."
(Writing by William Schomberg; editing by Suban Abdulla)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy running smoothly.
Monetary policy refers to the actions taken by a country's central bank to control the money supply and interest rates to achieve macroeconomic goals such as controlling inflation, consumption, growth, and liquidity.
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, managing monetary policy, and ensuring financial stability in the economy.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the amount borrowed or saved. They are influenced by monetary policy and economic conditions.
The UK economy is the economy of the United Kingdom, characterized by a mixed economy with a significant services sector, manufacturing, and a focus on international trade.
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