Money latest: Inflation falling doesn't mean we should cut interest rates, Bank of England economist says

Recent falls in inflation may have spurred talk of interest rate cuts, but the Bank of England's deputy governor has said this is not necessarily enough reason to slash rates. Speaking at the University of Chicago, Huw Pill said it would be better to cut rates too late rather than too early. He said little had changed with the inflation and interest rate situation since late March, and that there were 'greater risks' associated with going too early.

Despite optimism among some, Mr Pill said there is still a 'reasonable way to go' before inflation has stabilised to the level needed for the UK to meet its 2% inflation target in a sustainable way. 'This assessment further supports my relatively cautious approach to starting to reduce Bank rate,' he said. Mr Pill had voted to keep the Bank rate unchanged at 5.25% in the most recent meetings of the Bank's Monetary Policy Committee in March. Inflation currently stands at 3.

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Bank of England governor talks up interest rate cut prospects as inflation eases to 3.2%While Andrew Bailey sees further progress in the battle against inflation, most financial market bets are now firmly placed on a first interest rate cut not happening until August at least.
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