BoE policymaker Megan Greene said inflation may hover around 3.5% for the rest of 2025, warning that the disinflation path now looks more like a “plateau” than a “hump.”
Speaking in a speech, Greene cautioned that this could entrench elevated inflation expectations and influence wage and price-setting behaviors—particularly as food and energy prices, both highly salient for consumers, continue to surprise to the upside.
Greene said the risks are “skewed to the upside” on inflation and “to the downside” on growth—arguing for a cautious policy stance.
She also pointed to persistent domestic data noise and multiple unresolved global uncertainties, including US budget negotiations, “reciprocal tariffs” deadlines, and geopolitical tensions, as reasons to avoid rushing rate cuts.
“It’s unlikely that the uncertainty from these events – and subsequent developments – will be resolved any time soon. I therefore think a careful and gradual approach to removing monetary policy restrictiveness continues to be warranted,” she emphasized.
