BoE’s Pill Warns Medium-Term Inflation Risks Are Creeping Higher

Bank of England Chief Economist Huw Pill said the U.K. continues to record progress on disinflation but warned that the balance of risks has moved slightly higher for the next two to three years. Pill told reporters that recent price gains stem largely from one-off factors, yet there is a danger those pressures could spill over into more persistent inflation. A softening labour market is helping to counteract those forces, he added. If price- and wage-setting behaviour starts to change, the central bank will need to reassess whether the current pace of interest-rate reductions can be maintained, Pill said.