BoE's Greene Warns Against Delaying Action on Second-Round Inflation Effects

Key Facts

1Megan Greene stated that waiting for second-round inflation effects to manifest in wages and prices would be too late for the Bank to act.

2Greene believes the bigger risk is not being proactive enough on inflation rather than raising rates too soon.

Megan Greene, a member of the Bank of England's Monetary Policy Committee, stated that waiting for second-round inflation effects to manifest in wages and prices would be too late for the Bank to act. According to investinglive.com, Greene believes the bigger risk is not being proactive enough on inflation rather than the potential downside of raising interest rates too soon.

The hawkish remarks come as market expectations for a November rate hike reached 84%, with Greene emphasizing the need for restrictive policy to combat energy-driven shocks. The report noted concerns that wage growth of approximately 3.5% next year could prompt firms to further increase prices, reinforcing the risk of persistent inflation spirals.