Bank of England Economist Calls for Prompt Interest Rate Hike Amid Energy Shock

The Bank of England's chief economist, Huw Pill, has called for a prompt interest rate hike to tackle inflation threats sparked by the Middle East energy shock.

Pill reiterated his concerns about leaving interest rates unchanged while waiting for clearer signs of how the Iran war has affected inflationary dynamics in the UK economy. He was one of two members on the nine-person Monetary Policy Committee (MPC) to vote to raise interest rates in July, but was outvoted by a majority preferring to keep rates at 3.75%, including governor Andrew Bailey.

Pill said he is uncomfortable with a 'wait-and-see' approach and believes raising interest rates to 4% would deliver a clear signal of the MPC's willingness and ability to address upside risks stemming from events in the Middle East.