Bank of England Chief Economist Huw Pill said the central bank should raise its key interest rate to 4%, arguing that a prompt increase would reduce the likelihood of needing more forceful action later to contain inflation that has accelerated amid the war in the Middle East. In remarks prepared for the Edinburgh Chamber of Commerce, Pill said a swift, well-communicated hike need not begin a prolonged and aggressive tightening cycle and could help head off catch-up dynamics in wages and prices that threaten to make temporary inflation overshoots more persistent. He also cautioned against fine-tuning the policy rate amid significant uncertainty around energy prices. Pill and two other members of the nine-person Monetary Policy Committee voted for an increase in July, while six colleagues preferred to hold Bank Rate at 3.75% pending clearer signals on the conflict’s longer-term inflation impact. Interest-rate futures indicated just over a 15% probability of a quarter-point hike at the MPC’s next meeting this month, rising above 70% for November. Earlier Bank analysis projected inflation could reach 6.2% in early 2027 if elevated energy prices persist, compared with baseline forecasts of 3.2% to 3.5%, after UK natural gas prices rose more than 70% and petrol prices roughly 10%.