Published by Global Banking & Finance Review®
Posted on June 7, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GoogleThe Bank of England remains cautious about UK inflation, with Megan Greene highlighting risks despite expectations of fading price growth.
DUBROVNIK, Croatia (Reuters) -The Bank of England still expects the ongoing rise in UK inflation to fade but is "not sanguine" about it after price growth proved more persistent than anticipated only a few years ago, BoE monetary policymaker Megan Greene said on Saturday.
Britain suffered a bigger than expected inflation surge in April - even after taking out an error in the data - prompting investors to bet on the BoE slowing its already gradual pace of interest rate cuts.
"Our view is that we can look through it, but of course there's a pretty big risk," Greene told a conference in Croatia.
"The last time we had a lot of second round effects. We're hoping that we won't have second round effects this time around, but we're not sanguine about it."
She argued the recent cost-of-living crisis, which saw inflation peak at 11.1% in 2022, might have made "people ... more sensitive to upticks in inflation and so that could feed through the wage-price behavior."
Greene, an external member of the BoE's Monetary Policy Committee, voted last month with the majority for a quarter-point cut in rates to 4.25% and has said she was part of the group who might have voted to keep rates on hold if it hadn’t been for U.S. tariffs.
She reaffirmed on Saturday that private-sector pay growth was "way above what would be consistent with a 2% inflation target".
"It's (going) in the right direction, it's just not going as quickly as I would like it to," she added.
(Reporting By Francesco CanepaEditing by Tomasz Janowski and Mark Potter)
The Bank of England expects the rise in UK inflation to fade but is 'not sanguine' about it, as price growth has been more persistent than anticipated.
Britain faced a larger than expected inflation surge in April, prompting investors to anticipate a slowdown in the Bank of England's interest rate hikes.
Greene stated that private-sector pay growth is 'way above what would be consistent with a 2% inflation target,' indicating concerns over wage pressures.
Greene highlighted the risk of second round effects from inflation, which could influence wage-price dynamics and complicate the economic outlook.
The inflation rate in the UK peaked at 11.1% in 2022, which has made people more sensitive to changes in inflation.
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