Welcome, then, Huw Pill.
The new Bank of England chief economist has popped his head above the parapet for the first time since landing the job over summer. What’s the verdict? No great change from predecessor Andy Haldane, it seems.
Pill said in a submission to the Treasury Select Committee that there were now “great concerns” about inflation as “the current strength of inflation looks set to prove more long lasting than originally anticipated”.
The comments — his first public statements since taking the job — suggest Pill, while less bombastic, isn’t too far removed in thinking from Haldane.
The former BoE chief economist was the arch hawk on the Monetary Policy Committee. His exit left a big gap when it came to challenging the narrative that the current inflation spike is just “transitory”.
The MPC is still clinging to that view but it’s getting tougher to defend by the day. Everywhere you look, prices are spiralling. It is no longer just because of bottlenecks. Higher wages are beginning to kick in, which will prove a more persistent inflationary pressure. Unlike shipping costs, it’s much harder to get wages down once they go up.
The bogeyman in all of this is stagflation — stagnant growth and spiralling inflation. Action is needed now to stop this toxic combination taking root.
Investors hope Pill will put pressure on the MPC to act. Odds of a rate hike this year are rapidly shortening. Pill has some convincing to do to get the rest of the committee on side — but the case is getting stronger by the day.