© Reuters. A general view shows the Bank of England building, in London, Britain November 3, 2022. REUTERS/Toby Melville
LONDON (Reuters) – Bank of England Chief Economist Huw Pill said on Friday the central bank was seeking to find a balance between returning inflation to the BoE’s target 2% level and slowing down the British economy too severely.
“What we are seeking to do, we’re always seeking to do, is to find that balance that gets us back to our 2% inflation target without generating unnecessary and costly problems in the real side of the economy,” Pill told CNBC television in an interview.
“Creating that balance, signalling that balance, that was really our key message yesterday.”
On Thursday, the BoE raised its benchmark rate by three quarters of a percentage point to 3.0% as it sought to combat risks from an inflation rate running above 10%.
It also warned investors that the risk of Britain’s longest recession in at least a century means borrowing costs are likely to rise less than they expect.