Pill Pushes for Prompt Rate Increase as Inflation Plateaus

Huw Pill, the Bank of England's chief economist, is pushing for a rate hike to 4% in order to combat inflation. He believes that waiting around for it to sort itself out is a gamble he doesn't want to take. His preferred approach amounts to a 25-basis-point nudge designed to keep inflationary expectations anchored before they drift further.

Pill first broke ranks at the April 2026 MPC meeting, casting the sole dissenting vote in favor of raising the Bank Rate to 4%. By June 2026, he had company. Megan Greene joined him in voting for the increase.

UK CPI inflation hit nearly 11% in 2022, a level that forced the BoE into one of its most aggressive tightening cycles in decades. The Bank Rate climbed all the way to 5.25% by the summer of 2024. Since then, the BoE has been gradually unwinding that tightening, bringing rates down to 3.75% by mid-2026 as inflation cooled.

Pill has explicitly warned against accepting a 3% inflation rate as a new normal, flagging 'second-round effects' as his primary concern: workers demand higher wages to keep up with prices, businesses pass those costs on, and the cycle feeds itself.