Bank of England Chief Economist Huw Pill said on Thursday that they still expect Consumer Price Index (CPI) inflation to fall in the second quarter due to large rises in energy prices from last year dropping out of the annual comparison, per Reuters.

Key takeaways

"Bank staff continue to expect GDP to decline by 0.1% in 2023 Q1."

"Precise path of inflation may be bumpier than we expect."

"High frequency indicators of momentum in wage developments appear to be easing."

"Aggregate lending measures have slowed only slightly."

"Latest data is somewhat disappointing but much better than BoE forecasts from late last year."

"UK banking system remains very robust and resilient."

"Inflation persistence is the key focus for where monetary policy needs to go."

"Good news that latest job growth has come from falling inactivity rates."

"Open question whether unemployment will need to rise to dampen inflation pressures from higher wage growth."

Market reaction

GBP/USD showed no immediate reaction to these comments and was last seen rising 0.4% on a daily basis at 1.2530.