Bank of England chief economist Huw Pill said on Tuesday that his outlook for the policy had not changed substantially since March. The official noted that the combination of little news and the passage of time have brought a Bank Rate cut somewhat closer. However, he added that the lack of news gives him no reason to depart from his baseline that time for cutting Bank Rate remained some way off.
Pill acknowledged that the policymakers are now seeing signs of a downward shift in the persistent component of the inflation dynamic but admitted that a reasonable way is still to be gone before he is convinced that the persistent momentum in underlying inflation has stabilised at rates consistent with 2% inflation.
Pill also suggested that the BoE will need to maintain a degree of restrictiveness in its monetary policy stance to squeeze the persistent component out of the system.
In addition, the BoE's chief economist warned against cutting rates too soon as, in his opinion, the greater risks lie with easing policy too early rather than too late.