BOE’s Greene: Cautious and gradual approch to easing is appropriate

The BOE’s Megan Greene wrote a column in the FT.

• UK consumption recovery lags behind other developed economies
• UK savings rate high at 10% vs 5% in the US
• Three factors damping UK consumption:
  1. Precautionary savings due to cost of living crisis
  2. Restrictive monetary policy
  3. Interest rate changes impacting household incomes
• Discretionary spending remains below pre-pandemic levels
• Higher interest rates incentivize savings, delay purchases
• Household income from interest on savings has increased
• Full impact of higher rates on mortgages not yet felt

Cable is at the lows of the day at 1.3004 but that’s being driven by broad US dollar strength.

This article was written by Adam Button at www.forexlive.com.