Bank of England Official Urges Proactive Rate Hikes
Megan Greene of the Bank of England advocated for proactive interest rate increases to prevent inflation from remaining above target levels.
Bank of England policymaker Megan Greene advocated for proactive interest rate hikes to combat inflation during a Centre for European Reform conference. Greene argued that the risk of failing to control inflation after five and a half years of above-target levels is a greater policy mistake than raising rates too high and needing to cut them later.
Greene was part of the Monetary Policy Committee majority that recently increased borrowing costs from 3.75% to 4%. She specifically warned that allowing pay growth to remain at 3.5% or higher could prompt firms to increase prices, further fueling inflation. Greene suggested that in times of uncertainty, policymakers should adopt an attitude of "how can I screw this up the least?"
Chief Economist Huw Pill supported the trend of tightening policy, indicating that further rate increases will likely be necessary in 2027 following an expected hike in December.
