BoE's Pill 'sceptical' markets are right to expect four rate rises
Bank of England chief economist Huw Pill said in Bangkok he is sceptical of market pricing for four 25bp rate rises over the next year, while saying the Bank should have acted earlier in the Iran war.
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The story, neutrally told
Right · 2Huw Pill, the Bank of England's chief economist, said he was 'sceptical' that the Bank will need to raise rates four times, as financial markets are pricing. Daily MailR “the Bank's chief economist Huw Pill said he was ‘sceptical’ of market expectations for four rate increases by the end of 2027.” Read at Daily Mail ↗ City A.M.RC “The Bank of England is unlikely to vote for the four interest-rate hikes forecast by financial markets, according to its chief economist” Read at City A.M. ↗ Right · 2Pill spoke at a Citi-organised event and to reporters on the sidelines of the International Monetary Fund meetings in Bangkok. Daily MailR “Speaking at an event organised by US bank Citi on the sidelines of the International Monetary Fund meetings in Bangkok” Read at Daily Mail ↗ City A.M.RC “He told an International Monetary Fund meeting in Bangkok he was “sceptical”” Read at City A.M. ↗ Right · 2Market pricing points to Bank Rate rising from 3.75 per cent to 4.75 per cent by the end of next year, according to the Daily Mail; City A.M. describes this as a full percentage point of tightening over 12 months. Daily MailR “Rates have been left at 3.75 per cent”“take Bank rate to 4.75 per cent by the end of next year” Read at Daily Mail ↗ City A.M.RC “raising rates by a full percentage point in the next year” Read at City A.M. ↗
Right · 1Pill said: 'To get 100 basis points [of rate rises], we need a concrete manifestation of these risks [to wages and prices]', adding that more evidence on second-round effects would come in the next six to nine months. City A.M.RC ““To get 100 basis points [of rate rises], we need a concrete manifestation of these risks [to wages and prices],” Pill told reporters.”““We will get more evidence in the next six to nine months on second-round effects.”” Read at City A.M. ↗ Right · 2Pill also said the Bank needs to get into 'the right position', which is 'increasingly obvious now', and that it should have voted for a rise early in the Iran war to show it was 'active', saying 'I don't think we have been in a good place.' Daily MailR “Pill said the Bank does need to get into ‘the right position’, adding: ‘That is something that probably is increasingly obvious now.” Read at Daily Mail ↗ City A.M.RC ““It would have been good to move early and influence market expectations, and send a clearer signal we were active and agile,” he said. “I don’t think we have been in a good place.”” Read at City A.M. ↗ Right · 2Pill has voted for a rate rise against the MPC majority, which has held rates; the Daily Mail says at the last four meetings and City A.M. says at every meeting since the war began. Daily MailR “Pill has previously broken with the majority of Bank of England’s Monetary Policy Committee (MPC) by voting for a rate hike at its last four meetings.” Read at Daily Mail ↗ City A.M.RC “Pill, who has voted to raise rates at every meeting since the Iran war” Read at City A.M. ↗
Right · 1Pill warned the Bank cannot keep relying on the tightening that has occurred 'organically' from holding rates instead of cutting them, calling it a 'hall of mirrors' that could become a 'house of cards'; five-year mortgage rates have risen above six per cent from below five per cent before March, per City A.M. City A.M.RC “branding it a “hall of mirrors” that could become a “house of cards”.”“The average rate of a five-year mortgage has jumped above six per cent from an average rate of below five per cent before March.” Read at City A.M. ↗ Right · 1Context: the Iran war has pushed oil above $100 a barrel and the Bank expects inflation above 4 per cent; the Fed and ECB are raising rates while the Bank has not, and governor Andrew Bailey said this week 'the longer this goes on, the harder it gets'. The Daily Mail says Pill is widely expected to get a hike next month. Daily MailR “the Bank’s governor Andrew Bailey this week acknowledged how the continued Middle East conflict could change the picture, saying ‘the longer this goes on, the harder it gets’.”“Pill is widely expected to get his way next month”“even as the US Federal Reserve and the European Central Bank go for hikes.” Read at Daily Mail ↗ Right · 1City A.M. notes that swap markets have consistently overestimated the number of Bank hikes since the conflict began and that second-round effects on wages and prices have not yet materialised, with price rises largely confined to energy and fuel. City A.M.RC “the swaps market has consistently overestimated the number of UK central bank rate hikes”“Price rises have so far been largely restricted to energy and fuel.” Read at City A.M. ↗
Every sentence links to the reporting it rests on. The pill in front of each says where its sources sit: Left, Centre or Right when one side supplies at least half of them, Mixed when they are evenly split. The number is how many outlets it cites.
Left0 outlets
No left outlet in our sources has covered this story yet.
Centre0 outlets
No centre outlet in our sources has covered this story yet.
Right2 outlets
- Framing
- Both outlets report Pill's remarks as a signal that market-implied rate rises may be overdone; the Daily Mail frames it as relief for mortgage borrowers, City A.M. also stresses Pill's view that the Bank was too slow to act.
- Emphasis
- Daily Mail: borrower impact, market pricing's effect on mortgages, expectation of a hike next month. City A.M.: second-round effects, swaps-market record, Pill's 'hall of mirrors' warning and criticism of the Bank's inaction.
- Leaves out or plays down
- The Daily Mail leaves out Pill's regret that the Bank did not act earlier; City A.M. does not mention the expectation of a November hike or Bailey's comments.
- Charged language
- “Hope for mortgage borrowers”“hawk”“hall of mirrors”“house of cards”
- For example
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“In a boost for mortgage borrowers fearing costs could spiral even higher” — Daily Mail
“branding it a “hall of mirrors” that could become a “house of cards”.” — City A.M.
What every side reports
- Huw Pill said in Bangkok he is sceptical of market pricing for four rate rises.
- The Bank has left rates unchanged during the Iran war while Pill has voted to raise.
- Inflation is expected to exceed 4 per cent.
Where accounts differ
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How often Pill has voted for a hike
- Right
- Daily Mail: at the last four meetings. City A.M.: at every meeting since the Iran war began.
Huw Pill person
Sceptical that four hikes are needed, wanting concrete evidence of wage and price effects first, but says the Bank should have moved earlier and prefers acting to relying on organic tightening.
“‘So there, I would be a little more sceptical.’” — Daily Mail
““Acting and being agile feels more comfortable to me,”” — City A.M.
Bank of England organisation
The MPC majority has held rates at 3.75 per cent, waiting to see whether the war's price shock feeds into wider wages and prices, though some members are reported to be signalling a rise.
“They have taken a wait-and-see approach to whether the price shock caused by the war feeds through to wider price and wage setting in the economy.” — Daily Mail
Left0 articles
No coverage yet.
Centre0 articles
No coverage yet.
Right2 articles
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Sympathetic Presents Pill's comments as good news for mortgage borrowers while noting building pressure for a hike.
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Banks of England chief economist ‘sceptical’ of markets’ interest rate expectations
Neutral Analytical account of Pill's doubts on market pricing alongside criticism of the Bank's slow response.
- 14 Oct 12:19 First Daily MailR Hope for mortgage borrowers as Bank of England chief economist 'sceptical' on forecasts of four rate hikes
- 14 Oct 16:31 +4h 13m City A.M.RC Banks of England chief economist ‘sceptical’ of markets’ interest rate expectations
Times are when each article was published, or when we first saw it if the outlet gave no time.
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