LONDON: Bank of England monetary policymaker Megan Greene said on Monday that wage and inflation measures were moving in the right direction but remained too high and that she was worried about rising public inflation expectations.
“What’s a little bit more worrisome for me is that medium-term inflation expectations have also started picking up,” Greene said in a panel discussion during a conference at King’s Business School.
Last week, Greene voted with the majority when the BoE’s Monetary Policy Committee cut interest rates by a quarter of a percentage point for the fourth time since last August.
Greene, who has previously been among the MPC members most concerned about inflation risks in the UK, said she had been among BoE policymakers who were initially unsure about whether to cut borrowing costs at the central bank’s May meeting.
BoE cuts rates to 4.25% as it sees tariff hit to growth
“I came into this last round quite torn about whether to hold or cut by 25 basis points,” she said, echoing comments earlier on Monday by BoE Deputy Governor Clare Lombardelli.
Rising trade tensions - started by U.S. President Donald Trump’s sharp U.S. import tariff increases - eventually helped to convince her of the need to lower rates, Greene said, adding that Monday’s announcement of a temporary U.S.-China agreement to suspend higher tariffs would not have changed her mind.
Greene said it was not yet clear what would happen to tariffs on trade between the United States and the European Union which was an important factor for demand in Britain.
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