Bank of England's Mann doubles down on backing for rate hikes
Last updated on: 06 February,2023 03:08 pm
Bank of England's Mann doubles down on backing for rate hikes
BUDAPEST (Reuters) - Bank of England rate-setter Catherine Mann on Monday backed further increases in interest rates and warned that pausing, as some of her colleagues advocate, risked a confusing “policy boogie” if it turned out rates would need to rise again.
After raising interest rates to 4% last week, the BoE’s Monetary Policy Committee (MPC) signalled it was close to pausing a run of interest rate hikes which began in December 2021.
Mann, consistently the most hawkish member of the MPC, said the risk of under-tightening policy would far outweighed the alternative.
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“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,” Mann said in a speech delivered to the Lamfalussy Lectures Conference in Budapest.
She criticised the idea of pausing the rate hike cycle at this juncture, a course of action that two of her MPC colleagues - Swathi Dhingra and Silvana Tenreyro - voted for last week.
“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,” Mann said.