No Need For Quarterly Rate Cuts

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No Need For Quarterly Rate Cuts

No Need For Quarterly Rate Cuts

Bank of England member Megan Greene recently gave a statement stating she doesn't see the need for quarterly rate cuts. This is an important statement and shows that the BoE is now thinking about pausing the rate-cutting cycle.

It's worth noting that Greene made it clear that she doesn't think the phase of rate cuts is over. It's just that she commented on how there's no need to keep lowering the rates every 3 months.

Unemployment Rate In Line With Forecasts

Greene said that it's better to cut the rates at a slower pace. This comes at a time when the markets are expecting the BoE to follow its schedule of quarterly rate cuts.

According to analysts, the Bank of England is likely to keep the rates unchanged at the next meeting in 2026. It's also worth noting that BoE Greene also opposed the August rate cut from the BoE.

She also talked about how the unemployment rate in the UK is in line with the forecasts. She also added how it has helped to lower the chances of higher inflation in the country.

Also, another development is that the workers are now hesitant to go and ask for higher wages. So, that's also something which will keep inflation under control.

Greene also added that a recent survey showed businesses are now quicker to raise prices whenever something happens. That's only natural, given that inflation remained above the target for years.

It's also a reality that inflation is still a big issue in the UK. Especially, the uncertainty and the fear that inflation might start to move higher once again.

So, to shield the economy from these risks, BoE Greene believes there's no need for quarterly rate cuts. Instead, she wants a more data-centric and slower approach to the rate cuts.

After all, it could become a big issue for the BoE if inflation starts to rise once again. To counter this, the central bank would have to tread carefully when it comes to rate cuts.

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