Finance
BoE's Pill does not expect much shift in rate view given high pay growth
Published by Global Banking and Finance Review
Posted on November 18, 2025
2 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 18, 2025
2 min readLast updated: January 20, 2026
BoE's Huw Pill maintains a steady rate outlook despite high wage growth, aligning with the 2% inflation target. Economic data remains a key factor.
By David Milliken and Suban Abdulla
LONDON (Reuters) -Bank of England Chief Economist Huw Pill said on Tuesday that he did not expect his view on interest rates to shift much in the near term, saying wage growth was still substantially above what he viewed as consistent with the BoE's inflation target.
"I think when you're talking about wage growth ... that's still growing substantially above ... what is consistent with the 2% inflation target," Pill told a panel hosted by French financial services company Natixis, pointing to weak productivity in the labour market.
The BoE's Monetary Policy Committee was split 5-4 this month, with Pill part of the majority supporting keeping rates on hold. Governor Andrew Bailey indicated that he might change his vote to support a cut at December's meeting, depending on incoming data.
Asked whether his view on borrowing costs had shifted since the BoE's meeting earlier this month, Pill said that he did not expect his view on rates to shift that much.
He also said policymakers should not place too much weight on often-noisy short-run economic data when assessing how rapidly inflation pressures are easing.
Pill said that he did not think Britain's underlying inflation pressures were as high as headline inflation of 3.8% might suggest.
But he noted that data measures related to inflation had not slowed as much as he would have expected in the past, despite an apparent recent slowdown in wage growth and higher unemployment.
"I think policymakers should be cautious about over-interpreting the latest news in data, because there is a lot of noise in the data flow, and partly because of some of the challenges our colleagues in the Office for National Statistics have faced," he said.
(Reporting by David Milliken and Suban Abdulla)
Monetary policy refers to the actions taken by a central bank to manage the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the principal amount. They are influenced by central bank policies and economic conditions.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
Wage growth refers to the increase in the average pay of workers over time. It can be influenced by factors such as demand for labor, productivity, and inflation.
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