MNI BRIEF: BOE Mann Worried By Services, Core Goods Inflation

A string of factors suggesting that inflation will run stronger than policymakers had previously expected and may not return easily to target, with her comments suggesting she sees the need for further policy tightening, Bank of England Monetary Policy Committee member Catherine Mann said Monday.

Mann, speaking at a Signum event, highlighted her concern over core goods and services inflation "remaining sticky," with food inflation having sky-rocketed and services inflation up at 3% and the scale of pay increases making it difficult to return to the 2% inflation target in the medium term.

The MPC is widely expected to hike 25 basis points again this month and Mann was asked if she might back a 50 bps hike but she said that she would not say what her vote would be at this meeting, with more analysis to be done.

In May, Mann voted with the majority for a 25 bps hiked and she said that inflation expectations "drifting down were an important ingredient for me to move from the 50 to the 25" along with her desire to see how the sharp increases in mortgage rates that are feeding through, as fixed rate mortgages are renewed, plays out.