MNI BRIEF: BOE's Greene-Further Soft Data For Considering Cuts

Bank of England Monetary Policy Committee member Megan Greene said on Thursday that more evidence that inflation persistence is not entrenched is needed to justify easing.

Greene, who switched from backing a hike to the no change camp in February’s policy vote, said in a speech at Fitch that UK services inflation was more elevated than in the eurozone or the U.S. and cited negative effects from the terms of trade shock and its tight labour market. She saw encouraging signs in the slow loosening of the labour market but said that pay growth stands out by international standards. (See MNI BOE WATCH: BOE Holds, Hiking Bias Removed From Statement)

"I would need to see further evidence that inflation persistence is less embedded than previously feared before I would consider voting to loosen policy," Greene said. "I don't think we can declare victory just because headline inflation hit our target very briefly.”