LONDON, Jan 23 (Reuters) - Bank of England policymaker Megan Greene said on Friday she remained concerned about signs of the pace of wage growth ahead and inflation expectations, warranting a slower path of interest rate cuts than the Federal Reserve.
Britain's jobs market weakened in the run-up to finance minister Rachel Reeves' November budget with private sector wages, closely watched by the BoE for signs of inflation pressure in the economy, growing at the slowest pace in five years.
But Greene
said the slowdown in the labour market appeared to be gradual.
"I will be watching household and business inflation expectations over the next few months to see if they come down in line with lower inflation outturns," Greene said in the text of a speech to the Resolution Foundation, a think tank.
Greene said the impact of spillovers from the United States and Europe on UK inflation and growth could prompt the BoE to slow its pace of cutting borrowing costs, diverging from the Federal Reserve.
"But looking at the potential spillovers from foreign monetary policy to UK growth and inflation, I find there is a strong case for the Bank of England doing exactly the opposite in the face of monetary policy divergence," she said.
While British inflation rose last month for the first time since July, BoE Governor Andrew Bailey has said it is likely to return to near the central bank's 2% target in April or May.
(Reporting by David Milliken; writing by William Schomberg; editing by Suban Abdulla and Andy Bruce)
