Bank of England Official Warns Against Rate Cuts Amid Rising Unemployment

Despite rising unemployment in the UK, Bank of England committee member Catherine Green is advocating for maintaining current interest rates. Her reasoning stems from a belief that the worst labor market downturn has already occurred and anticipates businesses preparing for higher wage growth. Green’s comments follow official data revealing the unemployment rate reached 5% during the three months leading up to September, exceeding expectations of 4.9%. This marks the highest level since early 2021, triggering a surge in bets by traders predicting an upcoming cut from the Bank of England. Notably, while Green is considered one of the more hawkish members on the nine-person Monetary Policy Committee, her stance on current rates aligns with the majority decision to keep them unchanged last week alongside four other officials advocating for a 25 basis point rate cut. She characterized the current policy as not being ‘meaningfully restrictive’.