In an opinion piece in FT, BoE MPC member Megan Greene explicitly urges market participants to “stop comparing” the monetary policies of the UK and US.
Greene’s commentary comes in the wake of the US March CPI inflation report released yesterday, which surpassed market expectations that “the Bank of England will cut rates earlier and by more than the Federal Reserve this year”.
“The markets are moving rate cut bets in the wrong direction,” Greene asserts, emphasizing that, contrary to market speculation, “rate cuts in the UK should still be a way off as well.”
Highlighting the unique challenges faced by the UK economy, Greene notes the “double whammy” of a tight labor market coupled with a more substantial impact from energy price shocks, which has made “inflation persistence” a more pressing issue for the UK compared to the US and other advanced economies.
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