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BoE's Pill says disinflation had stalled prior to the Iran conflict; concerned second round effects may be stronger and should be focusing on tackling those second round effects

The Bank of England's Pill expresses a cautious stance on inflation, acknowledging that disinflation has stalled and emphasizing the need to address potential second-round effects.

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Newsquawk Daily US Conference Calendar - 15th May 2026: APD

US President Trump says Chinese President Xi committed not to give Iran military equipment but said China will keep purchasing Iranian oil (something Sec. Bessent and others have long pressed Beijing to stop doing, through both rhetoric and sanctions).

BoE's Pill says disinflation had stalled prior to the Iran conflict; concerned second round effects may be stronger and should be focusing on tackling those second round effects

Ryanair (RYA) CEO reports booking volumes are slightly ahead of last year, with fares expected to increase by 1-2% for June, July, and August.

IMF says the world economy is clearly moving into the middle ‘adverse scenario’ with higher oil prices but medium-term inflation expectations remain anchored

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  • Do not expect second round effects to be as strong as they were in 2022. Must not allow ourselves to drift off into a deep space of unmoored inflation dynamics.
  • Labour market is not as loose as it was during the oil price spikes of 2008 or 2011.
  • There was excess money in 2022, but the opposite is now true.
  • Cannot confirm if rate rise would be temporary or a plateau for interest rates.
  • Maintains view BoE has to keep rates up for now.
  • High gilt yields are not a reason to avoid raising the Bank Rate if they reflect inflation concerns.
  • Growth outlook does not appear as weak as in 2008 or 2011.
Context

Despite concerns, he suggests those effects aren't expected to reach the levels seen in previous crises, yet insists that maintaining current interest rates is crucial to counter inflationary pressures. This outlook may impact market expectations for future rate hikes and gilt yields while reinforcing the BoE’s commitment to manage inflation sustainably.

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