Higher interest rates needed to 'purge' inflation risks, bank policymaker says
manchestereveningnews.co.ukA policymaker at the Bank of England has said interest rates need to stay higher for longer in order to “purge” the risks to UK inflation.
Catherine Mann, an economist and member of the Bank’s rate-setting committee, raised concerns over factors that could mean price rises remain above the official 2% target level for longer.
Her remarks come a day after the central bank voted to keep the UK base rate on hold at 5%. READ MORE: 'We dropped our BMW at Manchester Airport, what we came back to was disgusting' Governor Andrew Bailey sounded a note of caution when he said it is “vital that inflation stays low”, meaning the committee needed to be “careful not to cut too fast or by too much”.
It followed rates being cut from 5.25% last month, the first reduction since the onset of the Covid pandemic in 2020. Ms Mann, who is one of the more hawkish members of the Monetary Policy Committee (MPC), favouring a more restrictive policy, said she was particularly concerned about services inflation.
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