Huw Pill, chief economist at the Bank of England, speaks during an interview in London, UK. Bloomberg
Huw Pill, chief economist at the Bank of England, speaks during an interview in London, UK. Bloomberg
Huw Pill, chief economist at the Bank of England, speaks during an interview in London, UK. Bloomberg
Huw Pill, chief economist at the Bank of England, speaks during an interview in London, UK. Bloomberg

Bank of England warns of 'persistent inflation' and higher interest rates


Soraya Ebrahimi
  • English
  • Arabic

Inflation in the UK could become “more persistent” amid prevailing tough economic conditions, and interest rates may rise further, according to the Bank of England’s chief economist.

During a speech on monetary policy due to be delivered in New York, Huw Pill is expected to say that Britain is probably in a recession.

As a senior official influential in the Bank of England’s decisions over interest rates, he also confirms that the Monetary Policy Committee would be prepared to act “forcefully” if the outlook suggests more persistent inflation.

In the same speech, he will say that higher natural gas prices, a tight labour market and global supply bottlenecks create “the potential for inflation to prove more persistent”.

“It is therefore in this nexus that I focus in coming to my own assessment of the risks surrounding inflation persistence, which … will strongly influence my monetary policy position in the coming months,” he says.

The remarks suggest that Mr Pill would support another interest rate rise at the next committee meeting to put a lid on inflation.

Bank of England governor explains decision to increase interest rates — video

The base rate of interest is currently 3.5 per cent, the highest rate since October 2008, with the committee voting to increase the rate at each of its past nine meetings.

Mr Pill confirms in his remarks bringing down inflation to its 2 per cent target was the key driving force for the bank’s monetary policy decisions.

Higher energy prices across Europe, prompted by Russia’s invasion of Ukraine, have given a “significant impetus” to inflation over the past year.

But, even if natural gas prices stabilise or fall back down, inflation could remain high because households and businesses will still try to protect their incomes against higher energy bills, Mr Pill is expected to say.

UK's finance minister says he is focused on bringing down inflation as economy shrinks — video

“In an attempt to protect their own real income from the unavoidable impact of higher external prices, the longer that firms try to maintain real profit margins and employees try to maintain real wages at pre-energy price shock levels, the more likely it is that domestically generated inflation will achieve its own self-sustaining momentum, even as the external impulse to UK inflation recedes,” he explains.

It echoes similar recent remarks from the bank’s governor, Andrew Bailey, who said that while workers will want to seek pay rises as living costs soar, it could have the adverse effect of “locking in” high inflation in the UK.

Mr Pill also says that supply chain disruptions, which were worsened by Brexit, appear to have eased in recent months.

What is a recession? — video

The end of the zero-Covid policy in China this week could ease supply constraints, but the current surge in infection rates could “create its own disruption” to production, he cautions.

Furthermore, the tightening labour market, again influenced by Brexit and the impact of the free movement of EU workers into the UK, has had a bearing on inflation, Mr Pill says.

He concludes that both indicators will have to be watched closely by the bank.

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French business

France has organised a delegation of leading businesses to travel to Syria. The group was led by French shipping giant CMA CGM, which struck a 30-year contract in May with the Syrian government to develop and run Latakia port. Also present were water and waste management company Suez, defence multinational Thales, and Ellipse Group, which is currently looking into rehabilitating Syrian hospitals.

Who was Alfred Nobel?

The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.

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  • Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
  • Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
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If you go...

Flying
There is no simple way to get to Punta Arenas from the UAE, with flights from Dubai and Abu Dhabi requiring at least two connections to reach this part of Patagonia. Flights start from about Dh6,250.

Touring
Chile Nativo offers the amended Los Dientes trek with expert guides and porters who are met in Puerto Williams on Isla Navarino. The trip starts and ends in Punta Arenas and lasts for six days in total. Prices start from Dh8,795.

UAE currency: the story behind the money in your pockets
Conflict, drought, famine

Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.

Band Aid

Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.

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The bio

Date of Birth: April 25, 1993
Place of Birth: Dubai, UAE
Marital Status: Single
School: Al Sufouh in Jumeirah, Dubai
University: Emirates Airline National Cadet Programme and Hamdan University
Job Title: Pilot, First Officer
Number of hours flying in a Boeing 777: 1,200
Number of flights: Approximately 300
Hobbies: Exercising
Nicest destination: Milan, New Zealand, Seattle for shopping
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Favourite place to visit: Dubai, there’s no place like home

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Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

About Housecall

Date started: July 2020

Founders: Omar and Humaid Alzaabi

Based: Abu Dhabi

Sector: HealthTech

# of staff: 10

Funding to date: Self-funded

LA LIGA FIXTURES

Thursday (All UAE kick-off times)

Sevilla v Real Betis (midnight)

Friday

Granada v Real Betis (9.30pm)

Valencia v Levante (midnight)

Saturday

Espanyol v Alaves (4pm)

Celta Vigo v Villarreal (7pm)

Leganes v Real Valladolid (9.30pm)

Mallorca v Barcelona (midnight)

Sunday

Atletic Bilbao v Atletico Madrid (4pm)

Real Madrid v Eibar (9.30pm)

Real Sociedad v Osasuna (midnight)

Scorecard

Scotland 220

K Coetzer 95, J Siddique 3-49, R Mustafa 3-35

UAE 224-3 in 43,5 overs

C Suri 67, B Hameed 63 not out

Israel Palestine on Swedish TV 1958-1989

Director: Goran Hugo Olsson

Rating: 5/5

Top goalscorers in Europe

34 goals - Robert Lewandowski (68 points)

34 - Ciro Immobile (68)

31 - Cristiano Ronaldo (62)

28 - Timo Werner (56)

25 - Lionel Messi (50)

*29 - Erling Haaland (50)

23 - Romelu Lukaku (46)

23 - Jamie Vardy (46)

*NOTE: Haaland's goals for Salzburg count for 1.5 points per goal. Goals for Dortmund count for two points per goal.

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'How To Build A Boat'
Jonathan Gornall, Simon & Schuster

In numbers: China in Dubai

The number of Chinese people living in Dubai: An estimated 200,000

Number of Chinese people in International City: Almost 50,000

Daily visitors to Dragon Mart in 2018/19: 120,000

Daily visitors to Dragon Mart in 2010: 20,000

Percentage increase in visitors in eight years: 500 per cent

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Global state-owned investor ranking by size

1.

United States

2.

China

3.

UAE

4.

Japan

5

Norway

6.

Canada

7.

Singapore

8.

Australia

9.

Saudi Arabia

10.

South Korea

BEACH SOCCER WORLD CUP

Group A

Paraguay
Japan
Switzerland
USA

Group B

Uruguay
Mexico
Italy
Tahiti

Group C

Belarus
UAE
Senegal
Russia

Group D

Brazil
Oman
Portugal
Nigeria

Updated: January 10, 2023, 2:01 AM