LONDON (Reuters) – Britain’s central bank cannot consider the threats posed by inflation to be under control and rates will need to rise further despite the economy heading into recession and hampering the outlook, the Bank’s chief economist said. England, Huw Pill.
“I don’t think we can claim victory against inflation, but we are entering a recession,” Pill said at a conference hosted by UBS on Tuesday. “This is a difficult equilibrium scenario for monetary policy.”
Last week, the Bank of England made the biggest rise in borrowing costs in more than 30 years, when it raised interest rates by 75 basis points to 3.0% in a bid to reduce risks that the rate inflation above 10% becomes a long-term problem.
But the central bank also told investors it was pricing in many rate hikes in the future, a message that Pill said was an attempt to give a more realistic view of where the bank rate is heading.
(Reporting by David Milliken)
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