BoE Chief Economist Pill: No Evidence of Second-Round Effects

Pill's framing of the hike as precautionary, with no evidence of second-round effects, suggests the BoE is trying to keep expectations anchored without signaling a deeper tightening cycle. For rate-sensitive sectors and sterling, the emphasis on limited embedded inflation is the key signal, as it implies the bar for further hikes is higher than the headline decision alone would suggest. Whether wage and price-setting data continue to show no second-round effects is the open question that will determine how the BoE balances its next move.