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BoE's Greene says it is right to proactively tighten monetary policy stance - FT - Finance news and analysis from Global Banking & Finance Review
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BoE's Greene says it is right to proactively tighten monetary policy stance - FT

Published by Global Banking & Finance Review

Posted on November 11, 2026

1 min read

· Last updated: November 11, 2026

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BoE’s Greene Calls for Proactively Tightening Monetary Policy as Wage Growth Remains High

Bank of England Policymaker Highlights Risks of Persistent Wage Growth

Monetary Policy Stance and Wage Growth Concerns

LONDON, Nov 11 (Reuters) - Bank of England policymaker Megan Greene said on Wednesday it was appropriate to "proactively tighten our monetary policy stance" to ward against the risk of wage growth getting stuck at higher levels and firms passing those costs on.

Forward-Looking Measures on Pay Growth

Writing in the Financial Times, she added that forward-looking measures suggested pay growth was likely to stabilise over the coming year at or above 3.5% — above the level that would be consistent with keeping inflation around 2%.

Labour Market Dynamics and Inflation Risks

Listing the dynamics in the jobs market and wage growth, she wrote: "All of this suggests we don’t have as much slack as we thought and it may already have peaked.

"The risk of wage growth getting stuck at higher levels and firms passing those costs through is therefore greater, and it is appropriate to proactively tighten our monetary policy stance to lean against this."

Reporting and Editorial Credits

(Reporting by Kate Holton; editing by David Milliken)

Key Takeaways

  • Greene notes wage growth is likely to hover at or above 3.5%, exceeding the ~3.25% consistent with 2% inflation (bankofengland.co.uk)
  • She cautions that labour market slack may have peaked, increasing the risk of wage‑price spirals and second‑round inflation effects (bankofengland.co.uk)
  • Greene continues to advocate a ‘lean‑against’ policy stance—tightening now to pre‑empt inflation locking in, rather than waiting until effects materialise (bankofengland.co.uk)

References

Frequently Asked Questions

Why does Megan Greene support tightening monetary policy?
Megan Greene believes proactive tightening is needed to prevent wage growth from remaining high and fueling inflation.
What wage growth level does Greene mention as concerning?
Greene notes forward-looking measures suggest wage growth could stabilize at or above 3.5%, which is above inflation targets.
How does wage growth affect inflation risk?
Higher wage growth can lead to firms passing increased costs to consumers, raising inflation risk above the BoE's 2% target.
What does Greene say about the current job market slack?
She suggests the amount of slack in the job market may have peaked, indicating tighter labor conditions.

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