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The Bank of England may need to act "more forcefully" to lower inflation expectations, Monetary Policy Committee member Catherine Mann said Monday, criticising the current gradual pace of tightening and seemingly opening the way to her voting for a 75bps hike on September 15.
Speaking at a Money Macro and Finance Society Conference Mann restated her case for front-loading rate hikes, which suggests she could well vote for a greater than 50 basis point hike at the September meeting, which would be more forceful that the 50bps hike in August. She made the case that more forceful tightening now could avoid a deeper recession later, as less slack would be required to get inflation back to target.
UK Gilt yields are trading higher on the day, with the front of the curve bearing the brunt of the uptick as the curve continues to flatten. As Mann speaks, the UK market now prices 72bps of hikes at the September meeting.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.