BoE Policymaker Flags Stronger UK Growth as Rate Hike Bets Build

Bank of England policymaker Catherine Mann has flagged stronger UK growth as a reason to consider higher interest rates. In a recent podcast, she noted that Britain's economy is showing firmer momentum since the central bank's last monetary policy meeting.

Mann, who voted for a 25 basis-point rate hike at the last BoE meeting, said that inflation has come in slightly stronger than expected. This supports her argument that interest rates should err on the high side before adjusting downward if needed.

Financial markets now fully price in a BoE rate hike by year-end, but only assign a 15% chance of an increase at this month's meeting. The recent surge in UK gilt yields has pushed government borrowing costs to their highest levels in years, tightening the fiscal room ahead of the October Budget.