Maxco Futures — The Bank of England (BoE) is once again at a critical juncture in determining its monetary policy direction, and the latest remarks from Monetary Policy Committee member Megan Greene highlight that the central bank is not ready to ease rates unless the data shows a more convincing slowdown.
In an interview, Greene emphasized that “disinflation alone is not enough.” She will only support an interest-rate cut if the economy presents deeper signs of weakening—particularly in two key areas: the labor market and household spending.
Greene was part of the narrow majority in the BoE’s most recent decision to keep interest rates unchanged at 4%. That decision came amid rising political pressure and market expectations for a more dovish stance, especially as inflation has been trending lower.
But to Greene, the current economic backdrop remains too resilient to justify easing. She noted that a rising unemployment rate is not sufficient evidence of deterioration. What matters more, she said, are falling employment levels and signs of exhaustion among consumers—who have long been the backbone of the UK’s economic activity.
Meanwhile, the UK government has recently introduced a support package aimed at reducing household energy costs. While the program may ease inflation expectations among the public, Greene stated that its implications for monetary policy remain “uncertain.”
Greene’s comments highlight the ongoing divide among policymakers globally:
Should central banks respond to falling inflation by cutting rates, or should they wait for more definitive evidence of economic weakening before shifting to a looser policy stance?
For now, market participants still see room for a modest 25-basis-point cut to 3.75% by late 2025 — though the probability will depend heavily on how economic data evolves over the next three to six months.
At the moment, Greene’s message is clear: UK interest rates are not on a downward path yet. The Bank of England wants to see clearer signs of economic softening first — and until those signals appear, policy will remain in a cautious wait-and-see mode.
Technical Outlook: GBPUSD
GBPUSD continues to fluctuate within the daily range of 1.3200 – 1.3270. Upside potential remains possible toward the supply zone near 1.3370, which may act as the final upside test in the current short-term cycle.
Stochastic indicators show a potential bearish cross at 79.87.
Daily resistance levels are seen at 1.3370 and 1.3475,
while support levels sit at 1.3030 and 1.2990.
Ade Yunus, ST WPA
Global Market Strategies