Catherine Mann has been a member of the Bank of England’s Monetary Policy Committee for over a year now and has begun to flex her hawkish muscles. Over the past few meetings, she has voted for interest rates rises more than what has eventually been agreed.

Yesterday, she spoke of her fear that the Central Bank is losing its fight to bring down inflation to its 2% target. She spoke of her concern that the target that is set by the Government could become unattainable as the global moves into a new phase as the era of accommodative interest rates ended.

She sees that inflation is now becoming embedded in the UK economy, with the increasing level of industrial action threatening both fiscal and monetary stability.

There has been a significant increase in the level of inflation in the services sector. Pre-Covid, inflation in this area of the economy was running at well below 2%. It is now above 3%.

Mann was at the forefront of the call to initially front-load rate increases to get ahead of the threat of rising inflation. This was not considered a workable proposition since it could drive the economy into recession. Mann believed at the time that this was a risk worth taking, but her colleagues disagreed.

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