London, United Kingdom. Bank of England Chief Economist Huw Pill said on Monday that the central bank’s shift to communicating through multiple economic scenarios rather than a single forecast has made it harder for policymakers to form a collective view on interest rates. He also said he was concerned some policymakers had become complacent about inflation remaining above the bank’s 2 per cent target.
Shift to multiple scenarios
The Bank of England stopped publishing a single central projection for the economy in April, replacing it with three separate scenarios. In 2025, it also began including individual Monetary Policy Committee members’ explanations of their votes in policy minutes.
Speaking during a panel discussion hosted by the central bank of Uzbekistan, Pill said the use of scenarios had encouraged MPC members to focus more on their own views.
“By having the use of scenarios, I think we’ve tended to encourage (MPC) members to focus on their own view, seeking to have their own scenario, which to some extent comes to the detriment of the collective view of the committee, which ultimately drives the final decision,” Pill said.
Comments echo other policymakers
Pill’s remarks were in line with comments made last week by other MPC members, including Megan Greene and Alan Taylor.
Greene joined Pill in voting to raise the Bank of England’s main interest rate to 4 per cent from 3.75 per cent. Taylor, who is at the opposite end of the MPC policy spectrum, voted with the 7-2 majority to keep borrowing costs unchanged.
June decision and inflation concerns
In the minutes of the June policy decision, Pill said a rise in borrowing costs would help address the “significant uncertainties” facing the MPC over how businesses and households respond to higher costs and reduced purchasing power.
In a separate interview with British news agency PA Media, published on Monday, Pill said he was concerned that other policymakers had become complacent about inflation staying persistently above the central bank’s 2 per cent target.
“I do fear a little bit that, because we saw inflation go to 11 per cent, policy discussion becomes: ‘Oh inflation at 3 per cent is not so bad’,” Pill told PA Media.
