The chief economist of the Bank of England has described the new coronavirus variants ‘as a punch in the face’.
Huw Pill, who joined the Bank in September, said that the latest strains and further lockdowns ‘clearly would change our view of the world’.
Quoting former heavyweight boxing champion Mike Tyson, he added: ‘Everybody has a plan until you’re punched in the face.’
Concern: Economists have begun to speculate that fears surrounding the Omicron variant could push a rate hike further down the line
Pill’s comments, delivered in an online talk hosted by the Confederation of British Industry (CBI), came as the discovery of a fresh variant of Covid – named Omicron – panicked global markets.
The Bank of England had widely been expected to lift interest rates from their record low ’emergency’ rate of 0.1 per cent in December, when rate-setters including Pill next meet.
Pressure has been growing on officials to act in the face of soaring inflation, or rises in the cost of living. Rate hikes are often used as a tool to cool overheating prices, as they encourage households and businesses to save rather than spend.
But economists have begun to speculate that fears surrounding the Omicron variant could push a rate hike further down the line, as Bank officials wait and see whether fresh lockdown restrictions are imposed or consumers become more wary about spending.
Pill said: ‘If there’s a financial disruption, or if there’s the onset again of a pandemic and a lockdown, those are the type of events which clearly would change our view of the world. We don’t really know what the future holds.’
