MNI BRIEF: BOE Dhingra Sees Delayed Hit From Past Tightening

The effects of falling producer price inflation and previous rate hikes will take time to feed through to consumer prices, Bank of England Monetary Policy Committee member Swati Dhingra said Tuesday, as she expressed confidence that inflation would head lower.

In a speech at Manchester Metropolitan University Dhingra avoided direct comment on the next policy decision but painted a picture of disinflationary effects slowly feeding through the system, with the growth of fixed rate mortgages delaying policy pass through and the complexity of supply chains adding uncertainty to the pass through from producer to retail prices.

"There are reasons to suspect that policy transmission will be slower than previous cycles," she said, adding that rates were already increasing financial pressures on those taking out new mortgages.

She said that producer output inflation has closely tracked input price inflation, with output price inflation 5.4% on the year in April compared to its near 20% peak, and reduced inflation pressures should show up down the line. Dhingra has been in the minority opposing recent rate hikes, voting for unchanged policy in both March and May.