MNI BRIEF: BOE Mann Says Domestic Factors Driving UK Inflation

Domestic factors are driving headline UK inflation higher and elevated food inflation is pushing inflation expectations above levels consistent with the Bank of England's target, Catherine Mann, Bank of England Monetary Policy Committee said at a Washington event.

Mann, who opposed the most recent rate cut, made clear that nothing she has seen recently has reversed her view that UK inflation could well remain sticky and that policy needs to remain restrictive.

Food inflation, which research finds is key for household inflation expectations "is running well above five (percent) and probably going to be increasing through the course of the year down to the holiday period. That has been augmented by Brexit regulations, by packaging regulations," she said and elevated expectations are influencing firms' pricing strategies, with prices not falling despite relatively soft consumption, in Mann's view. (see MNI INTERVIEW: Recent Inflation Shocks Restrict Policy - Monti )

Mann has pushed back against the idea of hiking rates and reversing that but she looks likely to oppose near term easing.