Bank of England rate setter Catherine Mann: UK interest rates need to be raised further

To prevent further inflation persistence

Catherine Mann, one of the most hawkish members of the Bank of England’s Monetary Policy Committee, believes more tightening is needed to prevent further inflation persistence.

During a speech at the Canadian Association for Business Economics today (12 September), she said that holding rates constant at the current level risks "enabling further inflation persistence, which will have to be unwound eventually with a worse trade-off". "Would I rather assume that, with the current monetary policy stance and standard models, inflation is forecast to undershoot the target?," she asked.  "Or that, given what we have learned about time variation and non-linearities, we need to position ourselves accordingly and raise rates by more. I believe it would be prudent to ...