LONDON, June 29 (Reuters) – Bank of England Chief Economist Huw Pill said on Monday that the central bank’s shift in communications to focus on multiple scenarios rather than a single forecast makes it harder for rate-setters to reach a collective viewpoint, echoing concerns among other policymakers.
The central bank in April stopped publishing a single central projection for the economy in favour of three separate scenarios and in 2025 began including individual Monetary Policy Committee members’ own explanation of their votes in policy minutes.
“By having the use of scenarios, I think we’ve tended to encourage (MPC) members to focus on their own view, seeking to have their own scenario, which to some extent comes to the detriment of the collective view of the committee, which ultimately drives the final decision,” Pill said during a panel discussion hosted by the central bank of Uzbekistan.
Pill’s remarks chimed with those made by MPC members last week including Megan Greene, who joined Pill in voting to raise the BoE’s main interest rate to 4% from 3.75%, and Alan Taylor who is at opposite ends of the MPC policy spectrum and voted with the 7-2 majority to keep borrowing costs steady.
In minutes of the June policy decision, Pill said an increase in borrowing costs would help address the “significant uncertainties” the MPC faces around how businesses and households respond to higher costs and less purchasing power.
In a separate interview with British news agency PA Media, published on Monday, Pill said he was concerned that other policymakers had become complacent about having inflation persistently above the central bank’s 2% target.
“I do fear a little bit that, because we saw inflation go to 11%, policy discussion becomes: ‘Oh inflation at 3% is not so bad’,” Pill told PA Media.
Reporting by Suban Abdulla; editing by David Milliken.
