(Bloomberg) -- The Bank of England’s interest-rate setters appeared increasingly divided about the timing of cuts in the benchmark lending rate, with Chief Economist Huw Pill joining a group of hawks in voicing caution about lingering inflation.

In what’s likely to be the last scheduled remarks before the UK central bank’s next decision on May 9, Pill said there’s still a “reasonable way to go” before he’s convinced that underlying price pressures have been tamed. 

The remarks underscored resistance from at least four of the nine people on the BOE’s Monetary Policy Committee to start a sharp series of rate reductions in the next few months. Investors, who priced in as many as six quarter-point cuts at the start of this year, have been rapidly ratcheting back those expectations in the wake of hawkish comments and surprisingly strong inflation data in the UK and US.

Pill said that the first reduction since the start of the pandemic is “somewhat closer” as his assessment of the data has not shifted since his last speech in early March. However, the chief economist said he supports a “relatively cautious approach” to moves and warned there’s a bigger risk of easing too early than too late.

The comments reduce the chances that Governor Andrew Bailey and his colleagues will deliver a tonal shift that lays the groundwork for a cut later in the summer after their next meeting.

A raft of wage and inflation data along with remarks from BOE officials have given conflicting signals about the strength of the economy, price pressures and the thinking of policy makers. With no more speeches scheduled in the next week, Pill’s words may be the last guidance for investors before the decision.

Markets on Tuesday were also reacting to a big jump in UK government borrowing and stronger survey data pointing to a revival in the economy after last year’s recession. Prime Minister Rishi Sunak’s government is counting on better economic news to deliver a “feel-good factor” ahead of an election widely expected in the autumn. But forecasts for an uptick in growth are also based on rate cuts from the BOE.

Pill contrasted with the more dovish tone taken by Governor Andrew Bailey and Deputy Governor Dave Ramsden. Last week, those two distanced the UK from the resurgence in US inflation and hailed progress in curbing price pressures. Bailey had pointed to “strong evidence” of UK inflation is receding.

It suggested Pill is closer to the more hawkish stance taken by Catherine Mann, Megan Greene and Jonathan Haskel at recent events. The three external rate-setters have argued that a move to rate cuts should still be some way off, given the tight labor market and strong services inflation.

Deputy Governor Sarah Breeden also sounded cautious when she last spoke more than two months ago. Swati Dhingra has been pressing for rate cuts. Deputy Governor Ben Broadbent, who leaves the committee shortly, hasn’t tipped his hand lately.

Traders expect the BOE will be closer to the more gentle path on easing at the US Federal Reserve than the early loosening being lined up by the European Central Bank. 

Pill said on Tuesday that the economy and price pressures have evolved roughly as he expected at the start of March. As a result, “the absence of news and the passage of time have brought a Bank Rate cut somewhat closer.”

However, he pushed back against expectations of an imminent move, saying there was “still a reasonable way to go before I am convinced that the persistent momentum in underlying inflation has stabilized.”

“In my view there are greater risks associated with easing too early should inflation persist rather than easing too late should inflation abate,” he said. “I am erring on the side of caution with reducing the bank rate.”

Economists and Pill now expect a sharp drop in price pressures in April due to easing energy costs. He cautioned against getting “over excited” when headline inflation falls to around the 2% target given underlying measures being tracked by the bank suggest the battle to tame prices is not over.

“I do think that the persistent component of inflation is being squeezed out of the system by restrictive monetary policy,” he said. “But I don’t see reason to believe that is happening more rapidly or profoundly than I expected six months ago.”

Speaking earlier on Tuesday, Haskel doubled down on his more cautious stance, warning that the “very tight” UK labor market is only loosening slowly.

“Where we are going depends strongly on V/U (the vacancies to unemployment ratio) and the labor market,” he said. 

Greene last week also expressed concerns that underlying inflation may be persistent.

“In my view, rate cuts in the UK should still be a way off as well,” she said. “The risk of inflation persistence is diminishing as these indicators come down in line with the MPC’s forecast. But they remain higher than in other advanced economies, particularly the US.”

--With assistance from Andrew Atkinson.

(Updates with comment from the speech and Q&A.)

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