MPC member Catherine Mann said inflation above the 2 percent target looks embedded and could feed into early-2027 wage talks. She has voted for rate rises in July and September.
Bank of England policymaker Catherine Mann said on Tuesday that inflation running above the 2 percent target appears to have become embedded in the British economy and could become further entrenched in wage negotiations early next year.
Mann, who joined the Monetary Policy Committee in 2021, spoke at a conference hosted by TS Lombard. She said inflation had been well above target for her entire time on the committee. She voted for a quarter-point rate increase in July and in September.
She said last week that the Bank had erred in March, after the Iran war began, by letting investors think it was content to wait and see on rates. Unlike the European Central Bank and the US Federal Reserve, the Bank of England has held rates unchanged since the war's outbreak, Reuters reported. Markets now expect a move at the November meeting.
Mann said she was particularly concerned that inflation looked set to reach about 4 percent around the turn of the year, when many employers set annual pay. Other MPC members have said they will watch for outsize wage deals but have noted a weaker jobs market than in 2022.
Reuters did not report a new official inflation print in the same story. Mann's remarks are her assessment, not a Bank forecast release.
People Sentiments Negative
- Mann said inflation has become embedded
- She warned pay talks early next year could entrench it