Bank of England's (BoE) Chief Economist, Huw Pill, has stated that the UK's economy is exhibiting slightly more momentum than anticipated, and pay growth is proving to be a bit faster than

the central bank had predicted last month. BoE had previously forecasted that the country would experience a shallow but extended recession lasting over a year as households and businesses navigated through the aftermath of the surge in energy prices last year. However, Pill, while speaking at an event hosted by the Institute of Directors, said that the recent data had been more positive than expected.

Pill noted that survey indicators released since the publication of the forecast have surprised positively, suggesting that the current momentum in economic activity could be slightly stronger than initially predicted. The preliminary February purchasing managers' index (PMI) data, which rose unexpectedly into the growth territory for the first time since July, supports this notion.

On Wednesday, BoE Governor, Andrew Bailey, also remarked that the bank may not require further rate hikes. However, the members of BoE's Monetary Policy Committee (MPC) are divided on whether the previous year's increase in inflation, reaching a 41-year high, poses a significant risk of a lasting increase in underlying inflation pressures.

In the most recent data, Pill highlighted how the official measure of private-sector pay growth, excluding bonuses, has risen faster than BoE's forecast last month. It implies that the labour market could be tightening faster than the central bank had previously estimated. Photo by Images George Rex from London, England, Wikimedia commons.