BOE's Mann warns of entrenched inflation risk in UK

Bank of England Monetary Policy Committee (MPC) member Catherine Mann has raised concerns about persistent high inflation in the UK economy. Speaking at a conference hosted by TS Lombard in London on the 6th, Mann stated that inflation has remained well above the 2% target since she joined the MPC, describing it as entrenched.

Mann expressed particular worry about inflation potentially reaching 4% around the year-end and New Year period, a time when wage negotiations are most active. She warned that wage increases could further drive up prices, exacerbating inflationary pressures.

Since July, Mann has been part of a minority voting in favor of raising the policy rate by 0.25 percentage points to 4%. While some MPC members now support rate cuts, Mann and others maintain a hawkish stance due to ongoing price pressures.

UK inflation spiked above 11% in 2022 before easing in 2024, but it has yet to return to the target level. The debate within the MPC reflects differing views on how to address the inflation challenge.