Last month, Greene declined to vote for an immediate rate rise, as the MPC voted 8-1 to hold borrowing costs. She was, however, among several committee members to indicate that a future increase remained under consideration, as the Bank attempts to determine whether the current inflation spike could produce a more persistent feedback loop.
At the time the conflict began, the MPC considered monetary policy to be in restrictive territory. A subsequent tightening of financial conditions in markets has provided rate-setters with additional room to wait. Greene acknowledged there were “already some signs of some persistence from previous shocks left in the economy” prior to the onset of the war.
“In my view, the risk is entirely on the upside though,” she told Bloomberg’s Odd Lots podcast. “There’s kind of a ratchet here. The risk to energy prices and also second-round effects are probably on the upside rather than the downside.”
On her decision to hold rates, Greene said “a big contribution was that we are going to get some news over the next six weeks or so.”