BoE's Mann warns of rising inflation pressures
By Benjamin Chiou
Date: Wednesday 14 May 2025
(Sharecast News) - Bank of England policymaker Catherine Mann, who last week was outvoted in the central bank's decision to cut interest rates, has said that the UK labour market has been more resilient than expected while household inflation expectations have increased.
The BoE voted to lower the Bank Rate from 4.5% to 4.25% on 8 May, claiming that there had been "substantial progress on disinflation".
Five Monetary Policy Committee members voted for a 0.25 percentage-point cut, while two preferred a 0.5pp reduction. However, Mann voted to keep rates on hold, along with chief economist Huw Pill.
In an interview with CNBC on Wednesday, Mann said she's "worried" about rising household inflation expectations in the near and medium term, along with increased goods price inflation and higher PMI input and output price data.
"That cascade from labour market weakness to pricing weakness did not happen," said Mann, explaining her decision to hold rates.
"I need to see the loss of pricing power. I need to see that firms are starting to be much more moderate in setting their prices across a broad range of products," said Mann, an external member of the MPC who was reappointed last year for a second term running until August 2027.
"The data that I've seen [shows] goods price inflation is actually going up, not down."
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