Bank of England policymaker Catherine Mann has indicated she is prepared to vote for a "proactive" interest rate increase later this year if inflation expectations and other price signals fail to show improvement.
According to the text of a speech she is scheduled to deliver in London, she stated her support for the current decision to hold the rate at 3.75% but warned that inflation could become embedded in prices. She plans to closely monitor data in the second half of the year to guard against price rises influencing wage settlements and inflation expectations.
She noted that the path of energy prices, corporate margin behavior, and the basis for wage negotiations in 2027 will be crucial in determining whether current cost pressures become more entrenched.
She expressed her belief that a proactive policy move could help steer inflation expectations and outcomes toward the 2% target if actual developments, particularly concerning expectations, prove unfavorable for the trajectory of underlying inflation.
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