Bank of England Monetary Policy Committee member Catherine Mann sees two-sided inflation risks, possibility faster tightening
There is plenty of uncertainty in the current economic outlook, with how fast the expected economic slowdown feeds through into wage setting and inflation expectations of prime importance, Bank of England Monetary Policy Committee member Catherine Mann said Thursday
In her speech, however, Mann left the door open to accelerating the pace of tightening, with the MPC having so far moved in 25 basis point steps.
"Should the impact on aggregate demand of the energy price shock end-up being more modest than currently foreseen, should wage and price expectations and outcomes remain as strong as they currently are ... a reassessment of the pace of tightening would be warranted," she said. Ahead of the May meeting she said a key issue was whether evidence emerges of firms' revising down price expectations which could "short-circuit the expectations-formation process underpinning the domestic inflation ratchet, which has been my central concern," softening the case for tightening.