LONDON, Sept 20 (Askume) – Bank of England rate setter Katherine Mann said on Friday she was cautious about the prospect of multiple interest rate cuts in the coming months and stressed that policy needed to remain restrictive.
US economists joined the majority of the Monetary Policy Committee (MPC) in keeping bank interest rates at 5.0% this week . Earlier, they had strongly advocated a sharp increase in interest rates as British inflation reached double digits.
On Friday, he reiterated his view that borrowing costs need to stay high to help “clean up” the inflation behavior among businesses and consumers.
“While I agree that most people are taking a break from the recently concluded session, I am cautious about starting a cycle of cuts,” Mann said in an upcoming speech in Lithuania.
“The risk management assessment suggests that it would be better to keep restrictive measures in place for a longer period of time amid inflation uncertainty, until risks to the right-hand side of the inflation process have abated, and then cut rates more aggressively.”
The Bank of England said on Thursday it would take a cautious approach to cutting interest rates as wage growth still looks uncomfortably high and policymakers remain divided over how quickly long-term inflation pressures will ease.
