Huw Pill, Chief Economist at the Bank of England (BOE), on Friday addressed the situation of the central bank regarding the rate hikes saying that it is important not to increase borrowing costs too high. The statement came a day after the BOE signaled its intent to pause the hike of interest rates that started in December 2021 soon.
“We have to recognise that we have done a lot with monetary policy already,” Pill said at Times Radio.
Pill also said, “Interest rates have risen by almost 400 basis points over a little more than a year, and, given the lags in the transmission of monetary policy, there’s quite a lot of the effects of those raises in interest rates still to come through”.
The BOE increased interest rates to 4% on Thursday, the highest rate since 2008. The chief economist also said that the full impact of the rate hike has yet to register on the British economy.
The forecast from the BOE showed the UK’s economy could fall this year and in 2024.
Pill noted that it is possible that the BOE will change its projections if the economy in the first quarter of this year register a growth.