Bank of England's Greene says UK pay outlook worries her

LONDON, Oct 8 (Reuters) - British employers look on course to raise pay by around 3.5% next year, a bigger increase than would be helpful in returning inflation to its 2% target, Bank of England policymaker Megan Greene said on Thursday.

"Early indications are that pay settlements should grow by around 3.5%. So there's not a whole lot of wage disinflation happening there, and that worries me," she said at a conference in Cape Town hosted by South Africa's STANLIB Asset Management.

Greene voted in June, July and September for the BoE to raise interest rates by a quarter-point to 4%. Financial markets expect a majority of the BoE's Monetary Policy Committee to back a rate rise to 4% at their next meeting in early November.

(Reporting by David Milliken; editing by Suban Abdulla)