Source: Sharecast
Huw Pill has long warned against adding to inflationary pressures by cutting rates too quickly, and was one of four members of the Monetary Policy Committee to vote against August’s 25 basis point cut to 4%.
He also backed this month’s decision to leave the cost of borrowing on hold.
The consumer price index currently stands at 3.8%, while food inflation has soared to 5.1%. Earlier on Tuesday the OECD increased its forecast for inflation for the UK, and now expects it to reach 3.5%, up from an earlier prediction for 3.1%.
However, speaking at the Pictet Research Institute in Geneva on Tuesday, Pill said he was now more relaxed about the outlook for price pressures.
According to Reuters, he said: "It’s always a question of a balance of risks. And you know, I have been on the side of saying maybe the balance of risks are more on the inflationary side than the disinflationary side.
"I think, through time, and also as markets reprice, that probably is changing. And personally I’m more comfortable now that I was six, nine, 12 months ago."
Pill also voted last week against slowing the pace of quantitative tightening, the only MPC member to do so.
The MPC wanted to slow the bond-selling programme, from £100bn to £70bn, to curb rising bond yields.
However, explaining his vote, Pill told attendees: "I was essentially a dissenter in summary because I put a higher weight on the need to get out of the quantitative easing portfolio a little bit quicker, and I have greater faith that market functioning is perhaps a bit more strong than others.
"I do think we have other tools in order to address concerns about market functioning."
The BoE has been reducing its gilt holdings, by selling off some of the bonds it acquired during periods of quantitative easing, since 2022.
