Bank of England Official Highlights Labor Market Challenges

Megan Greene, a member of the Bank of England's Monetary Policy Committee, has raised concerns about the increasing slack in the British labor market. Despite this, wage growth remains stubbornly high, exceeding what economic models can currently explain.

Inflation and Supply Weaknesses Add to Economic Pressures

Greene noted that while inflation expectations are still anchored, their upward trend is worrying. She emphasized her concerns over weak supply more than demand, suggesting that the British economy faces significant challenges ahead.

Impact of US Tariffs on the UK Economy

On the topic of international trade, Greene argued that US-imposed tariffs could have a disinflationary effect on the UK economy. She also warned that trade diversion could occur rapidly, adding another layer of complexity to the economic outlook.