Overview
- External MPC member Swati Dhingra used a Times column to argue that recent UK inflation reflects administered or indexed prices and global commodity shocks that are likely to pass.
- She urged further easing and has called for the Bank Rate to be lowered to 3.75%, below the current 4.0% after five cuts over the past year.
- Dhingra warned that keeping policy too tight risks hurting growth, noting that wage costs explain 61% of price growth in market‑based services but only 27% in administered services.
- Her view contrasts with fellow external member Megan Greene, who said policymakers should take a cautious approach to additional cuts given ongoing risks.
- OECD projections now put UK inflation at roughly 3.5% this year, the highest in the G20, adding pressure to the policy debate over the timing of further reductions.