LONDON, March 25 (Reuters) - Bank of England interest rate-setter Megan Greene said on Wednesday that she was not close to voting to raise interest rates at this month's Monetary Policy Committee meeting, which was dominated by the economic impact of the conflict in the Middle East.
"I wasn't tempted to hike," Greene said during a discussion event organised by U.S. investment bank Jefferies.
Last week, the BoE's Monetary Policy Committee voted unanimously to keep rates on hold and said it was "ready
to act" to keep inflation on track for its 2% target as the economy feels the impact of the U.S.-Israeli war with Iran.
While some MPC members said a rate hike might be needed, Greene said in her post-meeting comments that the risk of inflation persistence had risen "perhaps significantly" and that British households may have become more sensitive to inflation shocks.
On Tuesday, a survey published by U.S. bank Citi showed inflation expectations among the British public for the coming year had surged by the most in more than 20 years from one month to the next, leaping to 5.4% in March from 3.3% in February.
Greene said on Wednesday that this rise in inflation expectations did increase risks to the BoE's price stability target but that it was not a certainty that it would translate into undesirably big wage rises as the labour market was weaker than at the time of the last big rise in inflation in 2022.
Greene voted against the last two BoE rate cuts in December and August last year and has previously expressed concern about the stickiness of Britain's above-target inflation rate.
Investors on Wednesday were betting on at least two BoE quarter-point rate hikes by the MPC's late-July meeting, down from four hikes over the course of 2026 that were priced in earlier this week but a sharp change from the two cuts expected before the war.
(Reporting by William Schomberg; writing by David Milliken, editing by Andy Bruce)
