BoE MPC member Green said at an IMF meeting that UK growth running ahead of
expectations and a resilient labour market indicate the Bank has not tightened
policy enough and interest rates should be higher than current levels. She
warned the BoE should not rely on financial markets to deliver tighter
conditions. The IMF has raised its forecast for UK growth this year from 1.0% to
1.3%. "Our GDP data show monetary policy is not sufficiently tight and there is
not much spare capacity in the economy," she said, adding recent labour-market
data suggest the depth of weakness may have peaked while employment remains
loose. Green, one of the MPC's more hawkish members, has supported a 25bp rise
to 4% in recent months to guard against a wage–price spiral.
