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Megan Greene, a member of the Bank of England's monetary policy committee, has expressed ongoing concerns regarding persistent inflation risks in the United Kingdom. In her recent statements, Greene highlighted the potential for second-round effects from the current inflation cycle, particularly as early indications suggest that UK wages may rise by approximately 3.5% in the coming year. This anticipated wage growth raises alarms for Greene, as it could lead to higher prices in the economy.
Greene's remarks align with her previous hawkish stance, as she was one of the three policymakers who voted for a 25 basis points rate hike during the Bank's September meeting. She cautioned that delaying action in response to inflation could result in the central bank needing to catch up later, reinforcing her call for proactive measures to combat inflationary pressures.
Market expectations reflect a significant likelihood of another 25 basis points rate increase in November, with approximately 84% of traders pricing in this outcome. Greene's continued emphasis on the risks associated with wage growth and inflation is unlikely to dramatically alter market expectations, as her position has been clearly articulated since the last policy meeting. The focus now shifts to whether the remaining committee members who opted to maintain rates in September will be persuaded to act sooner rather than later.
Source: KLEA News