Overview
- Speaking at the Resolution Foundation, the MPC member said aggressive US cuts would likely lift American demand for UK exports, adding upward pressure on UK prices.
- She argued the Bank of England may need to diverge from the Federal Reserve by slowing its own rate reductions to guard against inflation persistence.
- She noted investors are assigning a significant risk to looser Fed policy in 2026, while President Trump keeps pushing for faster cuts and has signalled he will nominate a successor to Jerome Powell when his term ends in May.
- She stressed the UK’s status as a small, open economy that is highly exposed to global price dynamics rather than domestic forces alone.
- She said near-term disinflation looks safer after a £150 average household energy-bill cut takes effect in April, but she will monitor inflation expectations and wage signals, warning the decline in private-sector pay growth may have ended.