{"id":61516,"title":"Bank of England chief economist doubts market rate hike forecasts","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2026-10-15T05:47:48+00:00","modified":"2026-10-15T05:47:48+00:00","canonical_url":"https://stockmark.it/banks-of-england-chief-economist-sceptical-of-markets-interest-rate-ex/","markdown_url":"https://stockmark.it/banks-of-england-chief-economist-sceptical-of-markets-interest-rate-ex.md","json_url":"https://stockmark.it/banks-of-england-chief-economist-sceptical-of-markets-interest-rate-ex.json","category":"Banking","categories":["Banking"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/2026/10/bank-of-england-chief-economist-doubts-market-rate-hike.png?fit=1536%2C1024&quality=80&ssl=1","format":"news","language":"en-GB","content":"The Bank of England is unlikely to implement the four interest rate increases currently anticipated by financial markets, according to its chief economist. Huw Pill, who holds the most hawkish record on the Monetary Policy Committee, expressed scepticism regarding the necessity for such a sharp tightening of monetary policy. This assessment was made during a meeting of the International Monetary Fund in Bangkok, where he noted that the central bank should have raised rates at the onset of the conflict in Iran.\n\nPill downplayed the probability of the Bank raising rates by a full percentage point over the coming year, a trajectory currently implied by swap rates. He stated that achieving such a level of tightening requires concrete evidence of risks to wages and prices. The economist indicated that further evidence regarding second-round effects would become available within the next six to nine months. Despite the threat that the Iran war poses to inflation, potentially pushing it above four per cent at the start of next year, Pill maintained that the current market expectations were excessive.\n\nTraders have consistently overestimated the number of UK central bank rate hikes since the Middle East conflict began. The swaps market currently suggests the MPC will vote for four rises in the next 12 months. However, officials have kept Bank Rate unchanged throughout the war, monitoring closely for signs of embedded price pressure. To date, second-round effects have failed to materialise, with price increases largely confined to energy and fuel sectors. Pill acknowledged that a projected 20 per cent jump in energy bills next year meant the Bank should have acted earlier to demonstrate agility and influence market expectations.\n\nOther policymakers have highlighted the organic monetary tightening resulting from the decision to hold rates steady rather than cut them. This shift has led banks and mortgage providers to increase charges on new borrowing. The average rate for a five-year mortgage has risen above six per cent, up from below five per cent before March. Despite this natural tightening, Pill warned against relying on it, describing the situation as a hall of mirrors that could become a house of cards. He argued that active intervention and agility were preferable to passive reliance on market adjustments, emphasising the need for the central bank to maintain control over its monetary policy decisions."}