© Reuters. FILE PHOTO: A person walks past the Bank of England in the City of London financial district in London, Britain, January 23, 2022. REUTERS/Henry Nicholls
LONDON (Reuters) – Bank of England Chief Economist Huw Pill said on Friday that interest rates would remain the main monetary policy tool for the central bank as it prepares to start selling bonds acquired as part of its economic stimulus efforts.
Pill said in a speech to the Walter Eucken Institut in Germany that selling assets, known as quantitative tightening (QT), would help to tighten monetary policy.
“But as long as we undertake any gilt sales programme in a gradual, predictable and well-communicated manner in a reasonably benign market environment, we can still use Bank Rate as the marginal instrument to achieve the inflation target over the medium term,” he said.
The use of rates would depend on how QT influenced asset prices and the wider economic situation, Pill said.
Rates will remain main policy took for BoE, Pill says