BoE's Mann says she could hike rates if inflation stays high

Bank of England policymaker Catherine Mann has signaled she is prepared to vote for an interest rate increase later this year if inflation expectations do not improve, advocating for what she termed an "activist" approach to monetary policy. Mann made the comments in a speech text released on Thursday, July 2, ahead of an event hosted by Natixis in London.

Mann, an external member of the Monetary Policy Committee known for her hawkish views, said she currently supports holding the Bank Rate at 3.75%. However, she warned that persistent price pressures risk becoming embedded in the economy, particularly through wage-setting behavior. She stated that if data in the second half of the year shows inflation expectations remaining unfavorable, an activist policy move could help steer both expectations and actual inflation back toward the central bank's 2% target.

The policymaker explained that at the June meeting, she saw greater upside risks to inflation than downside risks to economic activity. Despite this, she voted with the 7-2 majority to hold rates, citing significantly tighter financial conditions in markets at the time, which she said made an "activist hold" the appropriate...