Bank of England Monetary Policy Committee member Megan Greene has indicated that she sees UK consumer price inflation at a level that would support wage settlements of around 2.7% to 2.8% in 2027 and 2028. The comment links the expected inflation path directly to pay-setting behaviour, a channel policymakers watch closely because persistent wage growth can keep services inflation elevated even as headline CPI falls. For gilts and sterling, the transmission runs through rate expectations: if wage settlements are anchored near that range, the committee has less reason to cut rates quickly, which would support short-dated gilt yields and the pound relative to peers. Interest-rate-sensitive sectors and UK rate-linked instruments are most directly exposed to any shift in that repricing. Traders should watch the next UK CPI release from the Office for National Statistics and the Bank's upcoming rate decision for confirmation of whether the inflation trajectory matches Greene's framing.
BOE’S GREENE SEES CPI AT LEVEL TO BUOY 27-28 PAY SETTLEMENTS
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