Bank of England Chief Economist Huw Pill said on Tuesday that caution is still needed in assessing inflation prospects on account of the potential persistence of domestically generated inflation, as reported by Reuters.

Key takeaways

"The onus remains on ensuring enough monetary tightening is delivered to see the job through."

"There is a lot of policy-in-the-pipeline still to come through."

"Caution is still needed in assessing inflation prospects on account of the potential persistence of domestically generated inflation."

"MPC need to remain vigilant to signs of tightening financial conditions."

"I will base my may rate decision on data flow and its interpretation in the forecast."

"Recent developments in indicators of inflation persistence have been mixed."

"Wage developments, particularly higher frequency indicators of current momentum, appear to be easing."

"MPC should be cautious viewing better prospects for activity as something inherently inflationary."

"Relative to where we were a few months ago, the difficult trade-off facing monetary policy has eased."

Market reaction

GBP/USD preserves its bullish momentum on Tuesday and was last seen rising 0.75% on the day at 1.2505.