Bank of England chief economist Huw Pill argues that inflation risks remain despite a loosening UK labor market. Consumer price inflation reached 2.8% in April 2026, above the central bank’s 2% target, with forecasts projecting a rise above 3% by year-end. Unemployment has climbed to 5%-5.2%, but Pill warns that second-round effects, where businesses and workers pass on rising costs, remain a persistent threat. The Monetary Policy Committee voted 6-3 to hold rates steady in July 2026, with Pill dissenting in favor of a 25 basis point increase.
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