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Mann worried on risk of tightening too little; will vote for cuts if she's wrong

BOE
  • "At issue in the current conjuncture, and speaking just for myself, the risk of tightening too little is more salient. I make this judgment for the UK based on a variety of information. For instance data on inflation in core and services persisting at over 6% for over a year by now. Econometric analysis of the decomposition of inflation dynamics into components of expectations and inertia reveals an increasing role for these, which is supportive of continued inflation persistence. Worrying to me, is that a statistically-derived time-varying trend of inflation has drifted above 2%."
  • "To pause or to hold the policy rate lower for longer risks inflation becoming more deeply embedded, which would then require more tightening in total, to both change inflation itself and to wring-out the embedded inflation that comes from the sustained duration above target. This is why I would rather err on the side of over-tightening. But, if I am wrong, and inflation decelerates more quickly and activity deteriorates more significantly, I will not hesitate to cut rates."
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