London Daily

Focus on the big picture.
Friday, Aug 22, 2025

BoE's Mann: inflation fears drove vote for half point rate hike

BoE's Mann: inflation fears drove vote for half point rate hike

Bank of England policymaker Catherine Mann said she voted for a half percentage point rise in interest rates this month because she saw little sign that public's price expectations were easing, which risked causing inflation to stay too high.
Mann was one of four Monetary Policy Committee (MPC) 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.

"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.

British inflation rose to 5.5% in January, its highest in nearly 30 years, and Mann said all MPC members agreed that was "way, way above our objectives".

But policymakers differed on the extent to which Britain's economy had recovered from the COVID-19 pandemic and whether there was likely to be lasting damage to the job market in the form of lower employment or participation rates, she said.

"I think it is pretty dangerous to talk about permanent changes to labour force participation at this stage," she said.

Official data shows a drop in the proportion of older people in work or looking for a job compared with before the pandemic, and around half a million fewer people in employment overall.

Some of that drop probably also reflects European Union nationals who left Britain after Brexit or during the pandemic, either temporarily or permanently.

Mann said central bankers globally had been blindsided by the pace at which energy prices had risen, partly due to geopolitical factors which they could not predict.

If 2022's inflation dynamics mirrored those of last year, inflation would overshoot the BoE's latest forecasts, which do not see inflation returning to its 2% target until early 2024, she added.

The BoE also needed to keep an eye on policy tightening by the U.S. Federal Reserve and potentially the European Central Bank. While higher rates abroad would tighten British financial conditions, they could also weaken sterling and push up inflation if the BoE lagged behind the curve, she said.

Financial markets currently expect the BoE to raise rates to 0.75% in March and to 1.75% by the end of 2022, with relatively little change despite Russia's invasion of Ukraine.
Newsletter

Related Articles

0:00
0:00
Close
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
Taylor Swift on the Way to the Super Bowl? All the Clues Stirring Up Fans
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Apple Expands Social Media Presence in China With RedNote Account Ahead of iPhone 17 Launch
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Bill Barr Testifies No Evidence Implicated Trump in Epstein Case; DOJ Set to Release Records
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
Emails Worth Billions: How Airlines Generate Huge Profits
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
JPMorgan Plans New Canary Wharf Tower
Zelenskyy and his allies say they will press Trump on security guarantees
Beijing is moving into gold and other assets, diversifying away from the dollar
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
The Drought in Britain and the Strange Request from the Government to Delete Old Emails
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
"No, Thanks": The Mathematical Genius Who Turned Down 1.5 Billion Dollars from Zuckerberg
The surprising hero, the ugly incident, and the criticism despite victory: "Liverpool’s defense exposed in full"
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
×