The Bank of England&rsquo s Megan Greene has cautioned against near-term cuts to interest rates, citing ongoing inflationary pressures.

Writing in the  Financial Times  on Thursday, Greene - a member of the Monetary Policy Committee - challenged market expectations that the BoE would cut rates earlier and by more than the Federal Reserve.

She said: " Macroeconomic fundamentals and inflation dynamics differ in the UK and US, and there&rsquo s a greater risk of persistence in the former.

" The markets are moving rate cut bets in the wrong direction."

She continued: " With both weaker supply and demand in the UK than the US, we have to look at signs of persistence to compare the inflation dynamics and potential rate paths.

" I am worried that second-round effects are having larger and longer lasting impact in the UK."

Greene added that the UK economy faced a " double whammy" of a tight labour market and a " terms of trade shock from energy prices. Inflation persistence is therefore a greater threat for it than the US. But market pricing for interest rates does not reflect this."

She conceded that as wage growth and services inflation eased, the risk of inflation persistence would diminish.

But she concluded: " They remain higher than in other advanced economies, particularly the US. Momentum in the markets has been towards pricing in later rate cuts by the Fed, as economic growth remains robust.

" In my view, rate cuts in the UK should still be a way off as well."

The BoE raised interested rates 14 times from December 2021 as it looked to tackle surging inflation.

However, with inflation now well off peaks at 3.4%, the cost of borrowing has been left on hold at 5.25% since August 2023.

At February&rsquo s meeting, the MPC voted eight-to-one to leave rates unchanged, with external member Swati Dhingra voting for a 0.25 percentage point cut.

In February, two members - Catherine Mann and Jonathan Haskel - had voted a 25 basis point hike, however, to 5.5%.

Money markets currently expect the BoE to trim interest rates by around 45 basis points this year. Analysts are split as to when the first cut will occur, with some arguing in favour of spring and others summer.

The next MPC decision is due 9 May

NZ Reserve Bank keeps Official Cash Rate unchanged at 5.5%