LONDON (Reuters) -Bank of England Chief Economist Huw Pill said on Wednesday that central bankers needed to make a “clear and credible” commitment to controlling inflation, including responding firmly if inflation gets out of hand.
Pill – who voted against the BoE’s most recent rate cut to 4% in August – said a speech he was giving at the University of Birmingham was not intended to be a comment on the current stance of monetary policy or the economic outlook.
But he said he backed what he called a “conservative” approach to setting interest rates.
“More weight should be given to robust ‘eternal verities’ in running monetary policy, at the expense of pursuing fragile optimising approaches specific to a given set of often ephemeral circumstances,” he said in a text of the speech released by the BoE.
“The credible commitment to an aggressive monetary policy response should inflation get out of hand induces behaviour that makes it much less likely that inflation will get out of hand,” he added.
(Reporting by David Milliken Editing by William Schomberg)
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