London Daily

Focus on the big picture.
Monday, Jun 02, 2025

Bank of England rate-setter urges more hikes to avoid 'policy boogie'

Bank of England rate-setter urges more hikes to avoid 'policy boogie'

Just days after the Bank signalled that its core interest rate is nearing its peak, one member of the monetary policy committee makes the case for more rises.
A member of the Bank of England committee that sets Bank rate has urged her colleagues to stay the course in the battle against inflation, warning against the prospect of a "policy boogie" ahead.

Economist Catherine Mann, an external member of the nine-member monetary policy committee (MPC), used a speech in Hungary to make her case for further interest rate rises, arguing it would be more damaging to pause now.

She voted for the 0.5 percentage point increase to 4% that was revealed last Thursday - the 10th consecutive rise imposed by the MPC in a bid to help keep a lid on inflationary pressures in the UK.

But at the same time, the committee signalled that Bank rate was nearing its peak - with two members even voting for no change.

Ms Mann told her audience in Budapest that the risk of under-tightening policy far outweighed the alternative.

"We need to stay the course, and in my view, the next step in Bank rate is still more likely to be another hike than a cut or hold.

"In my view, a tighten-stop-tighten-loosen policy boogie looks too much like fine-tuning to be good monetary policy.

"It is both hard to communicate and to transmit through markets to the real economy," she added, saying that wage and price inflation were still too high.

The so-called doves advocating no rate rises argue that over-tightening risks sending the economy into an unnecessarily severe downturn, with higher rates in the economy hurting demand for borrowing and imposing extra costs on those holding mortgages that track Bank rate.

The International Monetary Fund recently predicted that the UK would fare worse this year than any other developed economy because of stubbornly high energy costs and weaker government spending.

Economists - along with Bank of England staff - see inflation falling sharply this year but while the headline rate falls, it is likely to be the case that the hit to living standards witnessed during the cost of living crisis so far takes far longer to ease.
Newsletter

Related Articles

0:00
0:00
Close
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
×