- There is a risk that self-sustaining inflationary dynamics embed in expectations
- Must guard against cutting too far or too fast
- Vote to maintain rates is a skip rather than a halt
- Continue to see rate cuts if the economy evolves as forecast
- Need to recognise CPI stubbornness as more pressing
- Shocks could prompt policy changes either way
Pill has made similar comments recently, so these are not new. There's been a slow but clear shift of focus in the MPC towards inflation recently. That shouldn't be too surprising given the elevated inflation and wage growth, and rising consumer inflation expectations.
