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Investing.com -- Bank of England policymaker Catherine Mann stated on Thursday that inflation expectations in the United Kingdom remain elevated, arguing that interest rates should continue to exert downward pressure on rising prices.
"It is perhaps counterintuitive that in order to create an environment conducive to growth, monetary policy must remain restrictive for longer," Mann said in a speech prepared for delivery at an event hosted by the Resolution Foundation think tank.
Mann emphasized that maintaining a restrictive monetary policy stance is essential "to bring inflation sustainably back to our 2% target in the medium term."
The rate-setter referenced her early career experience working under former Federal Reserve Chair Alan Greenspan, noting that Greenspan had clearly defined price stability as occurring when households and businesses stop factoring expected price changes into their decision-making processes.
"The evidence from consumer behaviour is that we are not there yet," Mann concluded, suggesting that UK consumers continue to make financial decisions with expectations of future price increases in mind.
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