BoE’s Pill challenges "wait-and-see" status quo, urges proactive inflation defense

Bank of England chief economist Huw Pill signalled a hawkish shift, challenging a “wait-and-see” stance and urging the MPC to adopt a more proactive, “policy-as-insurance” approach to guard the 2% inflation target. Pill cautioned against overreacting to high-frequency market data, noted increased labour-market slack vs 2022 that helps anchor expectations, but warned the inflation goal remains at risk and that holding rates may not be sufficiently restrictive. Markets reacted by bidding up sterling: GBP/USD rose 22 pips to 1.3545, and traders now price a ~43% chance of a rate hike at the June meeting.