BoE's Greene: Monetary policy will need to be restrictive 'for an extended period'

Worried about inflation persistence

The Bank of England’s newest Monetary Policy Committee member Megan Greene said monetary policy will need to be restrictive “for an extended period” to achieve the central bank’s 2% inflation target.

In her first speech as an MPC member on Thursday (30 November), the economist said this was because of the recent rise of the natural rates of unemployment and interest rates, contributing to the complexity of policy decisions. On the natural rate of unemployment, Greene said it may have been pushed up by "lower matching efficiency and higher real wage rigidity", which she said suggests the labour market could remain tight even as unemployment rises.  Megan Greene MPC appointment approved by Treasury Committee Meanwhile, the natural rate of interest may have drifted upwards thanks ...