Bank of England chief economist backs faster rate hikes amid Iran war in World Economy News 04/05/2026 The Bank of England should raise interest rates more urgently after entering the Iran war amid slowing progress in reducing inflation, according to its chief economist. Huw Pill, the only Monetary Policy Committee member to support higher rates on Thursday, said he was concerned about disinflation stalling even before the conflict pushed up energy prices. The MPC maintained rates at 3.75% on Thursday in an 8-1 decision, with Pill the sole dissenter. Minutes showed several rate-setters indicated they may consider hikes at future meetings as oil prices fluctuated wildly before the announcement. Speaking at an online briefing on Friday, Pill said the decision to hold rates left policy in a relatively good place. He said the panel was not frozen amid the uncertainty, but added he would prefer tighter policy. Pill said he believes a slightly higher level of interest rates would provide a better starting point given the uncertainties, and the committee should act more promptly in responding with higher rates. The BOE outlined multiple scenarios for inflation as it navigates uncertainty over the war’s outcome. While the BOE believes tighter financial conditions since the US and Israel attacked Iran are helping to contain the inflationary impact, its models suggested rates may need to rise. The most pessimistic scenario pointed to sharp increases in borrowing costs to prevent a feedback loop as firms pass on higher costs and workers bid up wages. Pill repeated Governor Andrew Bailey’s language from Thursday that the MPC had taken an active decision to leave borrowing costs unchanged, rather than adopting a passive wait-and-see approach. Pill said the committee should not overreact to daily fluctuations in energy prices as the war boosts volatility. He added that tightening in financial conditions has been an appropriate response to the inflationary impulse generated by events in the Gulf. Source: Investing.com 2026-05-04 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share