(Updates with quotes, detail throughout) By David Milliken WASHINGTON, Oct 17 (Reuters) – Bank of England Monetary Policy Committee member Megan Greene said on Friday that she did not see a case for the BoE to continue lowering interest rates every three months but did not think the rate-cutting cycle was over. "I think it's probably appropriate to cut more slowly," Greene said, adding that this was relative to past market expectations that the BoE would cut rates at a quarterly pace. Financial markets now do not fully price in a next quarter-point BoE rate cut until March 2026. Greene opposed the BoE's last rate cut in August – which passed by a narrow 5-4 majority. Speaking at the Atlantic Council think tank in Washington, Greene said a small rise in British unemployment on Tuesday was in line with her expectations, and helped to reduce the chance of high inflation translating into a wage-price spiral. "There's slack that's opened up in the labour market now. So that suggests that even if inflation expectations are high, workers aren't really in a position to go and push for higher wages." Recent wage data had been slightly below BoE forecasts, reducing upward pressure on labour-intensive services price inflation. But Greene said the central bank's surveys of businesses showed that they were now quicker to raise prices in response to one-off shocks after years of above-target inflation, increasing the risk that temporary rises in inflation become more persistent. "Price-setting is the other piece of a wage-price spiral … and it turns out firms are much more sensitive to upside surprises to inflation in figuring out where their prices will be in a year's time than they used to be," she said. The BoE has said one-off increases in regulated prices such as water bills look set to lift consumer price inflation to 4% in September, double the BoE's target. (Reporting by David Milliken, Editing by Louise Heavens, Kirsten Donovan)
(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
