BoE Chief Economist Pill says process of disinflation is intact, it is not complete; need to maintain monetary policy restrictiveness
Importance
Level 1
- Underlying inflation should be focus of policy.
- Key question for me is whether firms' wage and price-setting plans are settling at levels slightly higher than consistent with 2% CPI.
- Disinflation is not rapid or as convincing as he had hoped.
- Growth in the UK is positive but not very dynamic and strong cyclical component.
- Trend productivity is not going back to where it was.
- Productivity improvements are cyclical and mechanical.
- More concerned about a step down than step up.
- Disinflation in underlying services is flattening.
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