Commenting on yesterday's rate hike by the Bank of England (BoE), its chief economist Huw Pill noted on Friday, that the Bank's officials felt that it was the time to act to ensure the credibility of the inflation target. He added the BoE policymakers signalled in November that they were steering toward a rate increase because of a tight labour market.
When asked about whether more rate hikes should be expected, the economist said that he thinks that is true.
According to Pill, the data they have seen has confirmed that the UK's labour market is tighter than they expected in November, and they see reasons to expect it to tighten further. However, he added, that the Omicron variant has introduced a new level of uncertainty and the policymakers need to move forward now cautiously. "We need to assess whether Omicron is going to lead to some reversal of the strength of the dynamics in the economy, and particularly in the labour market," he noted.