Huw Pill: High levels of inflation will continue to persist in the UK

More than other advanced economies

The Bank of England’s chief economist has warned that high levels of inflation may be more persistent in the UK than in other advanced economies, despite a fall in wholesale energy prices and a looming recession.

In a speech in New York on Monday (10 January), Huw Pill suggested that the "distinctive" context that prevails in the UK - of higher natural gas prices with a tight labour market, adverse labour supply developments and goods market bottlenecks - creates the potential for more persistent inflation. "The risks surrounding inflation persistence will strongly influence my monetary policy position in the coming months," he said, signalling interest rates may have to stay higher for longer. He noted that wholesale natural gas prices may "stabilise or even fall somewhat" in the coming month...