Bank of England chief economist Huw Pill has indicated that interest rates may need to rise this year to control inflation. Pill, a member of the Monetary Policy Committee (MPC) which sets the base rate, stated on the Walescast podcast that the "speed limit at which you can run the economy is a bit lower than it's been in the past." The current inflation rate stands at 2.8%, above the Bank's 2% target. Pill, who is from Cardiff and attended Whitchurch High School, was among the minority of MPC members who voted for a rate increase in June. He noted that during his 56 months at the Bank, inflation has been at or below target for only three months, suggesting the Bank may have been "a little bit over optimistic" about the economy's trend growth. Pill also addressed productivity issues, particularly in Wales where it is the lowest of the four home nations and around 15% lower than the UK average, stating that improving efficiency is key to raising living standards.
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