BoE's Mann: Monetary policy has to be 'restrictive for longer' as UK faces 'upside risks' to inflation

MPC rate setter

Bank of England Monetary Policy Committee member Catherine Mann has argued UK interest rates may need to remain “restrictive for longer” until the risks to inflation dissipate.

In a speech at the Central Bank Research Association in Lithuania today (20 September), the MPC member shared her case for the BoE to adopt an "activist policy strategy". This would entail maintaining a restrictive approach to monetary policy until "tail risks" to the inflation process have subsided, allowing the central bank to then "cut more aggressively" once it is certain the inflation target of 2% has been achieved "sustainably in the medium term". Mann explained the UK has a greater need for such an approach than the US and eurozone because, being a "small, open economy", it is ...