A Bank of England policymaker has indicated support for raising interest rates, increasing the likelihood of higher borrowing costs ahead of the Monetary Policy Committee\u2019s next decision on 18th June.<\/p>\n
Megan Greene, a member of the Bank of England\u2019s Monetary Policy Committee (MPC), stated that \u201cthe case for hiking rates grows as the conflict wears on\u201d and that \u201ca tightening in monetary policy over the next few weeks or months may be necessary\u201d.<\/p>\n
Greene told The Times that she considered voting for a rate rise at the MPC\u2019s last meeting, when rates were left unchanged on an eight to one vote. Huw Pill, the Bank\u2019s Chief Economist, was the only committee member to back an increase at that time.<\/p>\n
\u201cThe risk of acting, even if inflation proves to be less persistent, is less severe than the risk of failing to act,\u201d Greene said. She noted that inflation has exceeded the Bank\u2019s target in seven of the past ten years, warning that \u201cthere is a risk that households and firms come to see this as a \u2018new normal\u2019 and adjust their behaviour accordingly\u201d.<\/p>\n
Such a shift in expectations would \u201cultimately require an even bigger monetary policy response to bring inflation sustainably to target\u201d, she added.<\/p>\n<\/p>\n
Bank Governor Andrew Bailey has taken a more cautious stance, stating that higher market borrowing costs had already \u201cin effect tightened policy\u201d, giving policymakers time to assess the impact of the conflict before making their next decision.<\/p>\n
Concerns about rising inflation have already pushed up mortgage rates, contributing to a slowdown in the housing market. Nationwide reported the first monthly fall in house prices this year in May, with its Chief Economist Robert Gardner attributing the \u201closs of momentum\u201d to higher energy prices and rising market interest rates.<\/p>\n
The potential for higher interest rates comes as policy discussions around property taxation<\/a> continue, adding to uncertainty in the property sector. Meanwhile, efforts to improve transaction efficiency<\/a> are underway as the market faces headwinds from potential monetary tightening.<\/p>\n The shift in tone from MPC members suggests that the committee\u2019s next rate decision may be more closely contested than the previous eight to one vote, with implications for mortgage affordability and property market activity in the coming months.<\/p>\n","protected":false},"excerpt":{"rendered":" A Bank of England policymaker has indicated support for raising interest rates, increasing the likelihood of higher borrowing costs ahead of the Monetary Policy Committee\u2019s next decision on 18th June. Megan Greene, a member of the Bank of England\u2019s Monetary Policy Committee (MPC), stated that \u201cthe case for hiking rates grows as the conflict wears […]<\/p>\n","protected":false},"author":1,"featured_media":9877,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-11329","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n