Bank of England's Greene says UK growth upgrade proves necessity of rate hikes

Monetary Policy Committee member Greene said that the UK economy is growing faster than expected and the labour market remains resilient, which shows the Bank of England has not done enough to curb inflation. The external member of the Monetary Policy Committee was speaking at the Atlantic Council during the International Monetary Fund meetings in Bangkok. She said interest rates should be higher than the current 3.75 per cent, and warned colleagues not to count on financial markets to do the tightening work themselves. Her remarks came after the IMF upgraded its forecast for UK economic growth this year from 1 per cent to 1.3 per cent. "The GDP data we are getting suggests that policy is not restrictive enough at the moment and there is not much slack in the economy," she said. "Some of the recent labour market data also suggests that the amount of slack in the labour market may have peaked and the labour market is loosening." Greene is one of the more hawkish members of the committee. Over the past few months, she has consistently voted to raise interest rates by 25 basis points to 4 per cent to guard against a wage-price spiral, but her view has so far been in the minority on the nine-member Monetary Policy Committee.