BoE MPC member Catherine Mann reiterated her hawkish stance on inflation during a panel discussion today, emphasizing the need for an “activist” approach to monetary policy. Mann expressed that she prefers to wait for more concrete evidence of underlying inflationary pressures easing before considering any policy loosening.
She highlighted the significance of monetary policy’s immediate effects on the economy, stating, “Part of my activist strategy is when I move, I will move big.”
Mann underscored that while the traditional view of long policy lags—the “olden day story,” as she referred to it—still holds some relevance, recent research indicates that rate adjustments can have prompt impacts on firms’ pricing decisions and inflation expectations.
As BoE’s most hawkish member, Mann maintained her cautious perspective on the inflation outlook. She pointed out the persistence of “pretty sticky” services inflation and cautioned about the potential for increased volatility in prices. “For those two reasons I say that inflation has not yet been vanquished,” she concluded.