MNI BRIEF: Need To See Policy Restrictive For Longer- BOE Mann

UK consumption remains weak compared to pre-Covid trends but high and volatile inflation was one of the factors scarring consumers and that monetary policy needed to stay restrictive for longer, Bank of England Monetary Policy Committe member Catherine Mann said Thursday.

Mann has largely been more conservative in voting for Bank Rate cuts in this cycle and while she put the spotlight on consumption weakness, with real household consumption far below trend and the saving ratio having risen to almost 12%, she continued to advocate tight policy.

The risks to consumption are "set against a background of persistently high inflation, and drifting household inflation expectations. Neither are target-consistent," Mann said in a speech at the Resolution Foundation. "If the consumption gap (with trend) was my only concern, reducing the restrictiveness of monetary policy would be appropriate. However, in light of elevated inflation and expectations, maintaining restrictiveness for longer would be appropriate," she said.