Latest news with #MeganGreene
Reuters
2 days ago
- Business
- Reuters
Bank of England is 'not sanguine' about inflation hump, Greene says
DUBROVNIK, Croatia, June 7 (Reuters) - The Bank of England still expects the ongoing rise in UK inflation to fade but is "not sanguine" about it after price growth proved more persistent than anticipated only a few years ago, BoE monetary policymaker Megan Greene said on Saturday. Britain suffered a bigger than expected inflation surge in April - even after taking out an error in the data - prompting investors to bet on the BoE slowing its already gradual pace of interest rate cuts. "Our view is that we can look through it, but of course there's a pretty big risk," Greene told a conference in Croatia. "The last time we had a lot of second round effects. We're hoping that we won't have second round effects this time around, but we're not sanguine about it." She argued the recent cost-of-living crisis, which saw inflation peak at 11.1% in 2022, might have made "people ... more sensitive to upticks in inflation and so that could feed through the wage-price behavior." Greene, an external member of the BoE's Monetary Policy Committee, voted last month with the majority for a quarter-point cut in rates to 4.25% and has said she was part of the group who might have voted to keep rates on hold if it hadn't been for U.S. tariffs. She reaffirmed on Saturday that private-sector pay growth was "way above what would be consistent with a 2% inflation target". "It's (going) in the right direction, it's just not going as quickly as I would like it to," she added.
Yahoo
2 days ago
- Business
- Yahoo
Bank of England is 'not sanguine' about inflation hump, Greene says
DUBROVNIK, Croatia (Reuters) -The Bank of England still expects the ongoing rise in UK inflation to fade but is "not sanguine" about it after price growth proved more persistent than anticipated only a few years ago, BoE monetary policymaker Megan Greene said on Saturday. Britain suffered a bigger than expected inflation surge in April - even after taking out an error in the data - prompting investors to bet on the BoE slowing its already gradual pace of interest rate cuts. "Our view is that we can look through it, but of course there's a pretty big risk," Greene told a conference in Croatia. "The last time we had a lot of second round effects. We're hoping that we won't have second round effects this time around, but we're not sanguine about it." She argued the recent cost-of-living crisis, which saw inflation peak at 11.1% in 2022, might have made "people ... more sensitive to upticks in inflation and so that could feed through the wage-price behavior." Greene, an external member of the BoE's Monetary Policy Committee, voted last month with the majority for a quarter-point cut in rates to 4.25% and has said she was part of the group who might have voted to keep rates on hold if it hadn't been for U.S. tariffs. She reaffirmed on Saturday that private-sector pay growth was "way above what would be consistent with a 2% inflation target". "It's (going) in the right direction, it's just not going as quickly as I would like it to," she added. (Reporting By Francesco CanepaEditing by Tomasz Janowski and Mark Potter) Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Bloomberg
2 days ago
- Business
- Bloomberg
BOE's Greene Sees Disinflation Continuing Despite Near-Term Hump
Bank of England rate-setter Megan Greene said disinflation in the UK is set to continue despite an acceleration in consumer-price growth in the near term. 'The disinflationary process is still ongoing and I say that even though inflation has actually ticked up over the past months and we expect it to continue to tick up through the third quarter of this year,' the UK central banker said on Saturday.
Bloomberg
4 days ago
- Business
- Bloomberg
BOE Tests AI as a Tool for Forecasting Inflation, Greene Says
The Bank of England is experimenting with artificial intelligence to help forecast inflation and hone its communications, according to rate-setter Megan Greene. She said Thursday that staff were testing a number of use cases for the technology, from providing early warning signals of financial crises to analyzing the labor market.
Yahoo
13-05-2025
- Business
- Yahoo
Bank of England interest rate-setters want inflation down before more cuts
Two Bank of England (BoE) policymakers have cautioned about further interest rate cuts, following last week's quarter-point reduction, as wage and inflation measures remain too high. Clare Lombardelli, deputy governor of the BoE, and Megan Greene, an external member of the Bank's Monetary Policy Committee (MPC), both said that while they supported the decision to lower interest rates to 4.25%, they were reluctant to take further action without more evident signs of inflation subsiding. In speeches to the BoE watchers' conference in London, both rate-setters pointed to persistent inflationary risks, particularly around wage growth and services inflation, which they argued remain too high to justify further rate cuts. Lombardelli said that although forward-looking indicators suggested 'substantial progress' in reducing pay growth by the end of the year, the latest data still showed that wage growth was "too high" to be consistent with the BoE's 2% inflation target. According to the Office for National Statistics, wage growth stood at 5.9% for the three months to February. Read more: Bank of England's commitment to bring inflation down is 'unwavering', says Bailey Lombardelli said: 'Monetary policy is still restrictive and the current stance reflects a balance between the need to continue to squeeze out underlying inflationary pressure and managing the risks of lower economic demand. 'Wage growth is still too high to be consistent with inflation at target. 'Caution remains appropriate. I'll be more comfortable when I see material deceleration in the data over a longer period.' Greene also raised concerns about the slow pace of improvement in services inflation, which was recorded at 4.7% in March. While services inflation had been gradually retreating, Greene expressed worry about the potential for inflation expectations to rise again. 'I don't think we can pull out the ticker tape and suggest it [inflation] is transitory,' Greene said. 'There is still reason to be concerned about inflation persistence.' Last week's rate cut marked the fourth reduction since summer 2024, lowering borrowing costs to their lowest level since 2023. However, the decision was met with a split vote within the MPC — five members supported the quarter-point cut, two favoured a larger half-point reduction, and two wanted rates to stay at 4.5%. Lombardelli described her vote as 'balanced between holding and cutting rates' but ultimately supported a cut amid 'gradual disinflation'. She explained that in the short term, Trump's tariffs and broader uncertainties about US policy would likely slow both UK growth and inflation. Read more: Cobalt Holdings plans to raise £175m in London IPO 'In the long term, if global trade were to fragment, this would reduce output and productivity and raise inflationary pressures'. Yet she said that tariffs were not the dominant driver for monetary policy in the UK as the country has a 'very open economy'. Greene echoed Lombardelli's view that trade policies could have a disinflationary effect. 'On net, trade should be disinflationary,' she said. She added that around 70% of the UK's exports to the US were in services, but tariffs on goods would still have a lot of indirect effects on the British economy. Green said the net disinflationary impact of tariffs was one factor why she had voted for the BoE to cut rates. 'I came into this last round quite torn about whether to hold or cut by 25 basis points," she added. Last week, the UK secured its first trade agreement with the US since the imposition of tariffs, agreeing to reduce levies on car and steel exports. However, the deal did not address the 10% tariff for most other goods. Read more: Best cash-saving deals as the Bank of England cuts interest rates Lenders in mortgage price war as Bank of England cuts interest rates UK-US trade deal benefits Rolls-Royce amid tepid FTSEError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
