MNI BRIEF: Doubtful Inflation At Target Sustainable - BOE Mann
MPC's Catherine Mann says her vote for a 25bps hike wasn't easy, but she has doubts inflation will return to target sustainably.
Bank of England's Catherine Mann said Thursday her vote for a 25 basis point hike at the MPC's February meeting was not easy, but she doubts the narrative that inflation is on track to return sustainably to target. (see MNI BOE WATCH: BOE Holds, Hiking Bias Removed From Statement)
Mann told an OMFIF event that the assumption goods inflation would return to around the zero level seen before Covid was undermined by risks stemming from Brexit, the reconfiguration of global supply chains, geo-political tensions and most immediately higher shipping and insurance costs due to the turmoil in the Red Sea - and that would need services inflation to decelerate quicker
While headline inflation could fall back to target near term the underlying dynamics are what will determine whether it stays there and Mann, who was one of only two to back hike in Feb, made clear that she has her doubts that it will.