BoE's Greene (Hawkish) says UK activity was already pretty weak before the Iran war, the war impact is inflationary
Importance
Level 1
- Not convinced the impact of negative supply shocks had worn off.
- Growth will be lower and inflation will be higher.
- Labour market slack and demand is much weaker.
- There are downside risks to demand.
- Not immune to weaker demand side.
- Will not have definitive evidence of second-round effects for a while and it could take months.
- MPC cannot just look through negative supply shocks, view needs to be more nuanced.