# Bank of England’s Mann doubles down on backing for rate hikes Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-02-06 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: Bank of England Rate-Setter Backs Further Interest Rate Meta Description: Catherine Mann warns against pausing rate increases to avoid policy confusion. Stay the course to combat inflation risks. URL: https://financedigest.com/bank-of-englands-mann-doubles-down-on-backing-for-rate-hikeshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-02-06t091038z1lynxmpej150durtroptp4britain-boe-mann-1736814483988-compressed.jpg) By Gergely Szakacs BUDAPEST (Reuters) – Bank of England rate-setter Catherine Mann on Monday backed further increases in interest rates and warned that pausing, as some of her colleagues advocate, risked a confusing “policy boogie” if it turned out rates would need to rise again. After hiking interest rates to 4% last week, the BoE’s Monetary Policy Committee (MPC) signalled it was close to pausing a run of increases which began in December 2021. Mann, consistently the most hawkish member of the MPC, said the risk of under-tightening policy far outweighed the alternative. We need to stay the course, and in my view the next step in [Bank Rate is still more likely to be another hike than a cut or hold,”](https://www.financedigest.com/bank-of-canada-seen-on-hold-even-as-economy-accelerates.html "Bank of Canada seen on hold even as economy accelerates") Mann said in a speech delivered to the Lamfalussy Lectures Conference in Budapest. Her comments coincided with research on Monday from consultancy Oxford [Economics that showed Britain](https://www.financedigest.com/new-pm-rishi-sunak-pledges-to-lead-britain-out-of-economic-crisis.html "New PM Rishi Sunak pledges to lead Britain out of economic crisis") is among the countries most at risk from “monetary overkill” – tightening policy too far. On some metrics, Britain ranked top. Mann, who held chief economist titles at the OECD and Citi, criticised the idea of pausing the [rate hike](https://www.financedigest.com/stocks-falter-as-economic-worries-nag-nz-delivers-big-rate-hike.html "Stocks falter as economic worries nag, NZ delivers big rate hike") cycle at this juncture, a course of action that two of her MPC colleagues – Swathi Dhingra and Silvana Tenreyro – voted for last week. In my view, a tighten-stop-tighten-loosen policy boogie looks too much like fine-tuning to be good [monetary](https://www.financedigest.com/uks-ftse-100-dips-on-scope-of-tighter-monetary-policy-informa-jumps.html "UK’s FTSE 100 dips on scope of tighter monetary policy; Informa jumps") policy. It is both hard to [communicate and to transmit through markets](https://www.financedigest.com/opus-trust-marketing-publishes-a-report-to-offer-insightinto-the-changing-face-of-customer-communications.html "Opus Trust Marketing publishes a report to offer insight into the changing face of customer communications") to the real economy,” Mann said. There were upside [risks to the inflation](https://www.financedigest.com/governments-and-central-banks-risk-inflation-bank-of-england-has-done-its-bit-now-the-politicians-turn.html "Governments and central banks risk inflation, Bank of England has done its bit, now the politicians’ turn") outlook, Mann said. From a risk-management point of view, monetary [policy has to lean against these upside biases since wage and price inflation](https://www.financedigest.com/boes-mann-falling-headline-inflation-high-core-make-policy-difficult.html "BoE’s Mann: Falling headline inflation, high core, make policy difficult") are still so high,” she said. At the other end of the MPC spectrum, Dhingra and Tenreyro say over-tightening risked sending Britain’s economy into an unnecessarily severe downturn, with the full force of the BoE’s [rate hikes](https://www.financedigest.com/dollar-hits-one-month-high-against-yen-as-traders-bet-on-fed-rate-hike.html "Dollar hits one-month high against yen as traders bet on Fed rate hike") yet to feed through. The BoE’s own forecasts show [inflation falling well below the 2% target](https://www.financedigest.com/the-mouse-that-roared-new-zealand-and-the-worlds-2-inflation-target.html "The mouse that roared: New Zealand and the world’s 2% inflation target") in the coming years. On Friday BoE Chief Economist Huw Pill, regarded as a centrist figure on the MPC, said it was important not to raise borrowing costs too high. (Reporting by Gergely Szakacs in Budapest, writing by Andy Bruce in Manchester; editing by Sarah Young, [William James and Kate](https://www.financedigest.com/uk-royals-in-u-s-spotlight-as-william-and-kate-visit.html "UK royals in U.S. spotlight as William and Kate visit") Holton) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---