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BOE: Greene may vote for November cut; still more hawkish than median MPC member

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  • Overall we read this such that Greene may vote for a cut in November, probably not in December, and she is likely to vote for less cuts earlier than other members of the MPC. Short-term she may be more dovish than Mann, but medium-term Greene may be more hawkish. And relative to the wider committee, we still think that Greene sits towards the hawkish end.
  • Greene outlines the 3 thought processes on inflationary developments that Bailey highlighted in his Jackson Hole speech and has since been used in the September MPC Minutes.
  • She says at the moment she sees the case of "a period of economic slack is required to bring inflation sustainably to target in the medium-term" as having the greatest probability.
  • She notes that she will be watching incoming data to provide evidence that the case of "structural changes in the economy that impact wage- and price-setting require monetary policy to remain tighter for longer" has increasesd. She also notes that the neutral rate may be higher than previously thought - without citing figures.
  • However, the most important part is probably "Until then, I believe a cautious, steady-as-she goes approach to monetary policy easing is appropriate." That suggests she is strongly considering voting for a November cut.
  • But she also notes that she sees the least probability of the case of ", the global shocks that drove up inflation continue to fade, and the persistence of inflationary pressures dissipates with a less restrictive stance of monetary policy than in other cases."
  • The Q&A is due to begin in a couple of minutes.
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  • Overall we read this such that Greene may vote for a cut in November, probably not in December, and she is likely to vote for less cuts earlier than other members of the MPC. Short-term she may be more dovish than Mann, but medium-term Greene may be more hawkish. And relative to the wider committee, we still think that Greene sits towards the hawkish end.
  • Greene outlines the 3 thought processes on inflationary developments that Bailey highlighted in his Jackson Hole speech and has since been used in the September MPC Minutes.
  • She says at the moment she sees the case of "a period of economic slack is required to bring inflation sustainably to target in the medium-term" as having the greatest probability.
  • She notes that she will be watching incoming data to provide evidence that the case of "structural changes in the economy that impact wage- and price-setting require monetary policy to remain tighter for longer" has increasesd. She also notes that the neutral rate may be higher than previously thought - without citing figures.
  • However, the most important part is probably "Until then, I believe a cautious, steady-as-she goes approach to monetary policy easing is appropriate." That suggests she is strongly considering voting for a November cut.
  • But she also notes that she sees the least probability of the case of ", the global shocks that drove up inflation continue to fade, and the persistence of inflationary pressures dissipates with a less restrictive stance of monetary policy than in other cases."
  • The Q&A is due to begin in a couple of minutes.