Bank of England (BoE) policymaker Megan Greene noted on Wednesday that a cautious approach is probably the best approach when it comes to easing monetary policy. Inflationary pressures continue to cook just beneath the surface of the UK’s domestic economy, making it difficult for the BoE to provide support for industries through easing interest rates.
Key highlights
It’s less likely inflation persistence will fade on its own accord, and more likely monetary policy will need to remain restrictive.
I believe it is appropriate to maintain a cautious and gradual approach to removing monetary restrictiveness.
The UK may now have lower threshold in which short-term inflation rise feeds through to second round effects.
Data over recent months has been uncomfortable.
A cautious and gradual approach to cuts appropriate.
I am hesitant to say a trade war is helpful for inflation.
Careful language suggests risks two-sided.
Read the full article here