BoE’s Greene sticks to view that rate cuts should be gradual

LONDON (Reuters) – Bank of England interest rate-setter Megan Greene said she still believed the central bank should take a cautious approach to cutting borrowing costs.

Greene, writing in a column published in the Financial Times on Monday, said it was possible that consumption could be stronger or weaker than expected.

“Given these risks, I believe a cautious, gradual approach to monetary easing is appropriate,” she wrote.

Greene said in September the BoE should take a cautious approach to cutting borrowing costs due to the risk of longer-term inflation pressures.

BoE Governor Andrew Bailey said earlier this month that the BoE could move more aggressively to cut interest rates if inflation pressures continued to weaken.

Data last week showed British inflation fell below the BoE’s 2% target and underlying inflation pressures, which are closely watched by the central bank, also dropped.

Investors are pricing a quarter-point cut in Bank Rate as a near certainty at the BoE’s November meeting and they are also betting heavily on another 25 basis-point reduction in December.