(Bloomberg) -- Bank of England policy maker Megan Greene said developed economies including the UK face a “bumpy ride” as central banks squeeze out the final effects of the global inflation shock, and interest rates may have to stay higher than some expect.

She also warned that the untangling of global supply chains since the pandemic may keep prices pressures elevated and may require marginally higher rates than under the more globalized world of the past.

Greene was speaking at an Institute of International Finance panel in Washington following a surprisingly strong reading for UK consumer price growth earlier in the day. 

Although she did not address the UK inflation figures directly, she said: “Bringing inflation to target has been a bumpy ride. It was always going to be. The last mile is going to be the hardest.”

The comments suggest Greene remains reluctant to vote for an early cut in the BOE’s benchmark lending rate, which at 5.25% is the highest in 16 years. Greene had been one of the hawks voting for rate rises at the BOE until recently. 

Investors have scaled back bets on BOE rate cuts after sticky inflation prints both in the US and UK, with the first quarter point reduction now fully priced for November.

Greene said she is “optimistic” for the world economy over the next year and is encouraged by the progress Britain and others have made on inflation. In the UK, inflation peaked at over 11% in late 2022 and is now 3.2%. The BOE expects it to fall below the 2% target next month. 

The International Monetary Fund this week forecast a soft landing for the UK, with inflation at target and the economic growth accelerating next year.

“I’m not as worried about it as I would have been had we had this panel a year ago,” she said. “We’re much closer to the target than we were even just a few months ago.”

She pointed to broader political risks for developed nations, especially further supply-chain shocks or a surge in energy prices due to the conflict in the Middle East. Those and the focus on economic resilience since the pandemic have led to “reshoring” that has unwound some past globalization. By reducing business efficiency, the impact of that is “on the margin inflationary,” she said.

“If you’re taking a 10,000 foot view, and looking at kind of big structural drivers in economics ... we are having slower globalization, and ultimately that puts some upward pressure on inflation,” she said. “It could mean that that and a host of other factors might mean that when the dust settles after the supply shocks, actually rates might need to be a bit higher than we thought they would need to be before.”

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