Bank of England Chief Economist Huw Pill said he sees a need to raise the Bank Rate to 4% from 3.75%, arguing that a prompt move could head off more aggressive tightening later. GBP/USD climbed after the comments, and interest-rate futures now show a far higher chance of a hike in November than at this month's meeting.
Huw Pill said the Bank of England should raise its Bank Rate to 4%, lifting it from the current 3.75%. According to Investinglive: "My own response has pointed to a need to raise Bank Rate to 4%." He added that the move need not start a prolonged hiking cycle, framing it instead as a prompt step to prevent inflation expectations from drifting further.
A hawkish warning on second-round effects
Pill argued that a quick increase could head off "insidious" catch-up dynamics that make above-target inflation more persistent. UK CPI has held at 2.8% for both March and April 2026, above the BoE's 2% target. He first dissented in favor of 4% at the April 2026 MPC meeting, and by June 2026 fellow committee member Megan Greene had joined him in voting for the increase.
The MPC's majority still wants to wait
Pill and two other MPC members already voted to raise rates in July, but colleagues who preferred no change outvoted them while awaiting clearer signs of what the Iran war means for long-term inflation pressures. Investors in interest-rate futures on Thursday priced the chance of a quarter-point rate hike at this month's meeting at little more than 15%. That probability rose to more than 70% for the November meeting.
GBP/USD tests key resistance
GBP/USD broke above its falling 100-hour moving average at 1.35206 following Pill's comments, a level that sits near the 38.2% retracement of the move up from the end-of-July low.
Holding above that area would keep the recovery intact, with the next test at the swing area between 1.3543 and 1.3557, followed by the falling 200-hour moving average at 1.3567. A move back below 1.35206 would weaken the bullish case built on Pill's remarks.
Sources: Investinglive, Economy News, Crypto Briefing
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