MPC member Catherine Mann spoke yesterday of her fears that a more dovish view on inflation that she is seeing from her colleagues could see the Bank of England pause the current cycle of interest rate hikes, only to be forced to begin them again as inflation remains at its current high level.

She believes that the tried and tested method of using data to spot turning points in the economy is being ignored due to the pressure being exerted on the Committee by the continuing cost of living crisis.

She feels that rather than seeing the cost of living fall if short-term interest rate increases are paused, or halted altogether, the economy will still see a significant recession in the next year to fifteen months, but the high level of inflation will remain and drive further demands for inflation busting pay demands in the public sector.

Furthermore, she went on to say that she remains mindful of the interest rates decisions being made by the country’s G7 partners and the fact that rising inflation is an issue for the global economy that has arisen primarily as the world has exited the Pandemic.

Mann acknowledged that there is a degree of interconnectedness between economies, particularly in the developed world, due primarily to the growth of digital communication and instant money transfers.

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