Bank of England (BoE) Monetary Policy Committee member Megan Greene stated on Saturday that the UK’s disinflation trend is expected to continue, even if consumer price growth rises temporarily in the near term. Her remarks, reported by Bloomberg, suggest the central bank remains focused on the medium-term inflation outlook.
Key Quotes:
“Most of the near-term hump in inflation is due to one-off factors.”
“We expect inflation to continue to come down to target over the medium term.”
“Our view is that we can look through it, but of course that’s a big risk.”
“There is a risk people won‘t consume even as rates come down.”
“Trade fragmentation should be disinflationary for the UK.”
“Going forward, we could see policy divergence.”
Greene acknowledged potential challenges, including consumer reluctance to spend even amid falling interest rates, and highlighted trade fragmentation as a longer-term disinflationary force.
Her comments also hinted at the possibility of divergence in global monetary policies as economic conditions evolve.
Market Reaction:
At the time of writing, the British pound posted modest gains, with the GBP/USD pair up 0.07% on the day at 1.3537.
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