BoE Greene sees growing case for rate hike amid war
Bank of England policymaker Megan Greene stated that the case for raising interest rates is strengthening as the conflict in Iran continues to drive inflationary risks. She argued that acting sooner rather than later is necessary to ensure inflation returns to the central bank target of 2%.
Megan Greene of the Bank of England stated the case for raising interest rates is growing as the conflict in Iran persists. The policymaker previously joined an 8-1 majority to hold rates at 3.75% during the April meeting. Megan Greene noted that higher borrowing costs may be required to prevent broad price increases and anchor inflation expectations at the 2% target.
### Why the Bank of England May Act Sooner In a speech to be delivered to the University of Derby later on Tuesday, Megan Greene argued that the speed of the central bank's response to inflation threats is as critical as the magnitude of the move. Waiting for definitive proof of the war's impact on prices would result in the Bank of England acting too late. Megan Greene believes the risk of over-tightening is less severe than the risk of allowing inflation to become persistent.
