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Bank of England's Pill sees "significant" move in November

09/27/2022 | 10:00am EST
FILE PHOTO: City workers walk past the Bank of England in the City of London, Britain

LONDON (Reuters) -The Bank of England is likely to deliver a "significant policy response" to finance minister Kwasi Kwarteng's huge tax cuts but it should wait until its next scheduled meeting in November before making its move, BoE Chief Economist Huw Pill said.

Kwarteng sent the pound tumbling and British government bond yields soaring with the announcement on Friday of sweeping tax cuts in a bid to shock the economy into a faster pace of growth.

"It is hard not to draw conclusion that this will require a significant monetary policy response," Pill told the CEPR Barclays Monetary Policy Forum on Tuesday.

Some investors and economists have said the British central bank should hold an emergency meeting now to agree on a big interest rate hike to counter the inflationary impact of the fall in the pound.

"I do want to flag clearly at this point that in my view the combination of fiscal announcements that we've seen will act as a stimulus," Pill said.

While the Nov. 3 date of the BoE's next scheduled policy announcement seemed a long way away, it was better for central banks to take a "more considered approach, a lower frequency approach," and in the meantime the BoE would rely on communicating its intentions, he said.

(Reporting by David Milliken and Marc JonesWriting by William Schomberg)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) 0.01% 0.55551 Delayed Quote.4.32%
BARCLAYS PLC -1.84% 158.28 Delayed Quote.-13.78%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) 0.01% 0.607574 Delayed Quote.5.35%
EURO / BRITISH POUND (EUR/GBP) 0.03% 0.8591 Delayed Quote.2.85%
INDIAN RUPEE / BRITISH POUND (INR/GBP) -0.07% 0.010058 Delayed Quote.3.35%
US DOLLAR / BRITISH POUND (USD/GBP) 0.04% 0.816627 Delayed Quote.13.28%
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