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BoE’s Mann says inflation expectations drove vote for 50 bp hike

Randy Mancini 2 Feb 25
FILE PHOTO: Bank of England (BoE) building seen in London
FILE PHOTO: The Bank of England (BoE) building is reflected in a sign, after the BoE became the first major world's central bank to raise rates since the coronavirus disease (COVID-19) pandemic, London, Britain, December 16, 2021. REUTERS/Toby Melville//File Photo/File Photo

February 25, 2022

LONDON (Reuters) – Bank of England policymaker Catherine Mann said she voted for a 50 basis point rise in interest rates this month because she saw little sign of an easing in the public’s price expectations, which risk causing inflation to stay too high for too long.

“To me, the data was still showing very robust expectations and I thought it was important to dampen those expectations using a 50 basis point increase,” she said in an online video discussion with Britain’s Society of Professional Economists.

“There was very little in the data that showed any diminution of expected wage increases, expected price increases or for that matter in financial markets … other than in gilts,” she added.

Mann was one of four Monetary Policy Committee members to vote to raise interest rates to 0.75% from 0.25% this month, rather than the increase to 0.5% backed by the majority of the committee.

(Reporting by David Milliken; editing by William James)