Bank of England MPC member Greene said it is preferable to take action now to
curb inflation rather than delay and risk significant second-round effects.
Greene was among the majority who backed raising the Bank rate from 3.75% to
4.0% at November’s policy meeting and had previously been in the minority
advocating earlier hikes. She said that with the inflation path highly
uncertain, policy should aim to minimize mistakes: the risk of overtightening
and later easing if second-round effects do not emerge is lower than waiting too
long and allowing inflation to get out of control. Given inflation has run above
target for about five-and-a-half years, failure to rein it in would be the
larger policy error.
