BoE’s Greene backs proactive inflation fight

Bank of England policymaker Megan Greene has emphasised that it is better to act proactively now to get on top of inflation rather than take a cautious approach that risks significant second‑round effects. At the Bank’s November meeting, she was among the majority of Monetary Policy Committee members who voted to raise borrowing costs to 4% from 3.75%, reinforcing a tightening stance aimed at containing persistent price pressures.

Speaking at a conference held by the Centre for European Reform on Nov. 14, 2026, Greene framed the current challenge as one of managing uncertainty around the inflation outlook. She said that when policymakers have "no idea where inflation is going" they should adopt an attitude of asking how they can "screw this up the least," underscoring her preference for decisive action despite the risks.

Greene restated her view that it is less risky for the Bank of England to raise interest rates too much and later cut them if second‑round effects fail to materialise than to wait too long to tighten and allow inflation to get out of hand. She characterised the failure to contain inflation after a prolonged period above target as the bigger potential policy mistake compared with the costs of over‑tightening.

She noted that inflation has been over the Bank’s target for about five and a half years, heightening concern that price and wage dynamics could become entrenched. In written commentary earlier in the week, Greene argued that it was appropriate for the Bank to "proactively tighten" its monetary policy stance to guard against the risk of pay growth getting stuck at around 3.5%, with firms passing increased labour costs through to higher prices.

Financial markets are currently pricing in further Bank of England tightening following the November move to 4%. Market participants expect another interest rate increase in December and anticipate two additional quarter‑point hikes in 2027, with rate expectations cited as potentially rising to near 5% as the tightening cycle progresses.

These expectations align with recent commentary from Bank of England officials about the likely path of policy. Chief Economist Huw Pill has indicated there is likely to be a need to raise rates further in 2027, in addition to an expected increase at the next meeting in December. Together with Greene’s remarks, this signals that policymakers see ongoing rate rises as a key tool to prevent inflation from becoming more deeply embedded.

Greene’s comments highlight the Bank’s focus on preventing second‑round effects, where past price shocks feed into wages and broader costs, from taking hold in the economy. By stressing the benefits of acting proactively even at the risk of having to reverse course later, she has underlined a willingness to prioritise inflation control over concerns about short‑term policy reversals.

Her stance, combined with market expectations of further rate increases and signals from other senior officials, points to a policy framework that remains firmly oriented toward restraining inflation after years above target. The current approach centres on front‑loaded tightening to minimise the risk that elevated inflation and wage growth become a persistent feature of the economic landscape.