Interest rates may need to increase this year to keep inflation in check, according to Huw Pill, the Bank of England's chief economist and one of nine people who get to decide whether your mortgage becomes more expensive. Pill, who hails from Cardiff, made the remarks on the Walescast podcast, noting that the "speed limit at which you can run the economy is a bit lower than it's been in the past."

Pill, a graduate of Whitchurch High School (whose alumni include Welsh sporting legends, though he took a different career path), is a member of the Monetary Policy Committee (MPC). The MPC sets the interest rate that influences mortgage costs, borrowing, savings returns, and inflation - currently at 2.8%, above the Bank's 2% target. Pill was among the minority who voted for a rate increase in June, and he believes another hike is needed this year.

"I've been at the bank for 56 months, inflation's been at or below target for three months, it's been above target for 53 months," Pill said, suggesting a pattern of bad luck and over-optimism about economic trend growth. He also pointed to sluggish productivity growth in the UK, particularly in Wales, where productivity is the lowest of the four home nations and about 15% below the UK average. Welsh wages are also lower, and welfare claims are high. Pill argued that improving infrastructure and education are key to raising living standards, though he acknowledged it's "a very difficult thing to deliver" given constrained public finances and tough political choices.

Before the Bank of England, Pill worked at the European Central Bank from its inception through the Eurozone crisis. He noted that central bank tools like interest rates and money printing are powerful but blunt - "It doesn't allow you to solve all problems." He cited Greece, Spain, Portugal, and Ireland as examples of countries that endured painful adjustments but "have come out the other side in stronger shape."

On a lighter note, Pill confirmed that the Bank's vaults hold 400,000 bars of gold bullion, which he has seen exactly once (during a Treasury Select Committee visit). His verdict: "It's very heavy and it's amazingly shiny."