Pill Pushes for Rate Hike to Counter Middle East Inflation Risks

Bank of England Chief Economist Huw Pill has called for interest rates to rise from 3.75% in response to inflationary pressures stemming from the Middle East energy crisis.

Pill made his comments at a speech at the Edinburgh Chamber of Commerce, where he stated that he was uncomfortable with the wait-and-see approach adopted by most of his fellow policymakers on the nine-member Monetary Policy Committee.

He argued that the bank cannot afford to sit on its hands while the conflict involving Iran sends shockwaves through global energy markets and feeds through to British prices.

Pill has been drifting away from the committee consensus for months, having voted in July to raise borrowing costs. He warned of the dangers of keeping rates steady while waiting for firmer evidence on how the Iran conflict will shape inflationary pressure across the UK economy.