Kwarteng’s tax cuts will force ‘significant’ interest rate rises by Bank of England

The Bank of England’s chief economist, Huw Pill, says: ‘It is hard not to draw the conclusion that this [tax cuts] will require a significant monetary policy response.’ Photograph: Bloomberg/Getty Images

A senior Bank of England official has warned “significant” increases in interest rates will have to be imposed by the central bank in response to tax cuts put forward by Kwasi Kwarteng in his mini-budget.

The Bank’s chief economist, Huw Pill, said the chancellor’s planned tax cuts would act as a stimulus and increase inflationary pressures, with the result that interest rates would need to go higher than previously forecast.