Bank of England rate-setter Megan Greene warned that interest rates will settle at higher levels than before the pandemic, adding to a growing consensus on the need for borrowing costs to remain elevated.
Greene said in an interview on Tuesday that the long-run neutral interest rate — known by economists as r* — has “crept up,” a shift that has been “well digested” by markets. Her remarks point to a growing consensus among central bankers that rates will need to end up higher than the ultra-low levels seen before the pandemic.