LONDON (Reuters) -Bank of England policymaker Catherine Mann said on Tuesday that inflation pressures remained a challenge despite a fall in the pace of pay growth in recent months, and that it was important to use interest rates to bring down price growth.
“We have seen wage rates come down, so people are getting wage increases, but not at the rate in the past,” Mann said in an interview with Business in Wales.
“And we’ve seen price inflation come down quite a bit, but it’s still a challenge because it’s still well above our 2% objective.”
Mann stressed the importance of using interest rates to bring inflation back to target.
“It’s important for us to continue to use monetary policy in order to get us to that 2% inflation objective because inflation is a tax on everybody,” Mann said.
Mann, an external member of the BoE’s Monetary Policy Committee, voted to keep borrowing costs steady at the MPC’s last two meetings, including one when a majority of her colleagues backed a cut.
Financial markets are betting on the BoE cutting rates by a quarter of a percentage point to 4% when it announces its next move on August 7, and see rates most likely falling to 3.75% by the end of 2025.
(Reporting by Suban AbdullaEditing by William SchombergWriting by William Schomberg)
