Bank of England policymaker Megan Green has said the bank should take a “steady and steady” approach to further base rate cuts to avoid rising wage and services inflation.
The outside member of the Monetary Policy Committee was among those who voted last week to keep interest rates on hold at 5 percent, following a 0.25 percentage point cut in August, the first rate cut in four years. 
The move came after inflation was reported at 2.2% in August, unchanged from July and just above the Bank of England's 2% target.
However, Green noted that “UK consumption is weakening overall”, linked to wage growth of 5.1% between May and July, the highest since April-June 2022.
Services inflation rose to 5.2% in the year to August from 5.6% the previous month, but the MPC wants to bring the figure down to below 5%.
“Services inflation remains persistently persistent,” Mr Green said in a speech to Newcastle Chambers of Commerce.
Before voting to cut rates, the Fed chief said he would “seek new evidence” that “a period of economic space is needed to bring inflation sustainably closer to our target.”
“It is clearly too early to see the impact of August's 0.25 percentage point rate cut,” the policymaker said.
“Until then, we believe a cautious and steady approach to easing monetary policy is appropriate,” he added.
Green noted that it takes a particularly long time for interest rate increases or decreases to trickle down to mortgage holders.
“More than 3 million households, representing 35 percent of all mortgages, are still paying interest rates below 3 percent,” she said in June.
Policymakers noted: “30% of mortgage accounts are expected to have their fixed rate expire by the end of 2026, with the typical homeowner expected to see their monthly payments increase by around £180, or 28%.”
“This will be a significant additional burden on future disposable income for many households, with a minority seeing even larger payment increases of 50% or more.”
Despite Green's comments, financial markets still expect the UK to cut its base rate at its November committee meeting, followed by a second cut in December.
