Last week the BoE held its benchmark rate at a 15-year high of 5.25%.
Share this article
Bank of England Chief Economist Huw Pill said on Thursday that the central bank needed to maintain a restrictive stance for monetary policy, as embodied in the BoE's latest forecasts, in order to return inflation to target.
"Having established monetary policy in restrictive territory, it's not the case that we need to raise rates in order to bear down on inflation. Sustaining rates at their current restrictive level will continue to bear down on inflation," Pill said in a presentation to the Institute of Chartered Accountants in England and Wales (ICAEW).
Last week the BoE held its benchmark rate at a 15-year high of 5.25% and said it was not thinking about cutting it as it continued to focus on bringing down inflation which stood at 6.7% in September, more than three time's the BoE's 2% target.
Pill said on Monday market pricing pointing towards a first interest rate cut in August 2024 "doesn't seem totally unreasonable". His comments led to a sharp fall in short-dated government bond yields on Tuesday.
BoE Governor Andrew Bailey reiterated on Wednesday that it was too soon to take about rate cuts.
(Reporting by David Milliken and Kylie MacLellan; editing by William James)