Bank of England Monetary Policy Committee member Megan Greene stated that the UK economy is growing faster than anticipated and the labor market remains resilient, which demonstrates that the central bank has not done enough to suppress inflation.
The external member of the Monetary Policy Committee made these remarks at the Atlantic Council during the International Monetary Fund meetings in Bangkok.
She argued that interest rates should be higher than the current level of 3.75% and cautioned her colleagues against expecting financial markets to complete the tightening process on their own.
Her comments came after the International Monetary Fund raised its forecast for UK economic growth this year from 1% to 1.3%.
"The GDP data we are getting suggests that current policy is not restrictive enough and there is not much slack in the economy," she said. "Some recent labor market data also indicates that the amount of slack in the labor market may have peaked and the labor market is loosening."
Megan Greene is one of the more hawkish members within the committee. Over the past few months, she has consistently voted in favor of raising rates by 25 basis points to 4% to guard against a wage-price spiral, but her position has so far been in the minority on the nine-member Monetary Policy Committee (MPC).