Mann Slams BoE Response to Middle East Shock

Catherine Mann, a rate-setter at the Bank of England, has criticized her own institution's response to the Middle East shock. Speaking at the Nomura London Macro Forum, she said that the central bank's initial response in March may have contributed to tighter financial conditions.

Mann stated that market borrowing costs rose after the outbreak of the Iran war due to expectations of higher inflation and possibly a monetary policy uncertainty premium. She argued that this premium raises nominal yields without necessarily tightening real financial conditions, which are insufficiently tight in her view.