Bank of England member Megan Greene said on Thursday that relying on high bond yields to control inflation is dangerous. She warned, "It's quite dangerous to just assume the markets will do your work for you." Greene previously voted to raise interest rates, which many expect to reach 4% soon.
LONDON, Oct 8 (Reuters) - The Bank of England should not continue to rely on high bond yields to do its job of taming inflation, Monetary Policy Committee member Megan Greene said on Thursday.
"It's quite dangerous to just assume the markets will do your work for you .... At some point, you need to put your money where your mouth is," Greene said at a conference in Cape Town hosted by South Africa's STANLIB Asset Management.
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Greene voted in June, July and September for the central bank to raise interest rates by a quarter-point to 4%. Financial markets expect a majority of the BoE's Monetary Policy Committee to back a rate rise to 4% at their next meeting in early November.
BoE Governor Andrew Bailey has argued that a sharp rise in market borrowing costs and mortgage rates after the start of the U.S.-Iran war has given the BoE time to assess if it needs to raise its own interest rates in response to higher energy prices.