Bank of England: the rise in inflation in the country is more of a plateau than a short jump

Megan Green, a member of the Monetary Policy Committee of the Bank of England (BoE), said that the recent increase in inflation in the UK is likely to be sustainable, rather than a temporary phenomenon. Therefore, according to her, it is necessary to act more cautiously when considering lowering interest rates.

Green noted that the short horizon of inflation now looks more like a plateau than a short jump, and that it will take time to ensure a steady downward trend in prices. Given the long period of high inflation, the key priorities for it remain maintaining price stability and a cautious, gradual approach to policy change.

At the last meeting, the Bank of England kept its key rate at 4.25%. Six of the nine Committee members voted in favor of this decision, while three favored a 25 basis point reduction. Economists expect the first decline to be possible in August.

The central bank pointed to signs of a slowdown in growth and a cooling of the labor market, as well as a slowdown in wage growth. At the same time, the BoE emphasizes that they do not adhere to a predetermined course and are ready to make decisions depending on the situation in the economy and geopolitics.