BOE’s Mann: Possible ‘drift’ in expectations requires more aggressive policy

WASHINGTON (Reuters) – The longer inflation remains above target the more aggressive central bankers need to be in reacting to it, Bank of England policy committee member Catherine Mann said on Monday, arguing policymakers need to address not just high inflation today but the risk of rising expectations in the future.

Policy “has to be more aggressive because it has to address both a drift in expectations as well as the actual inflation,” said Mann, who favored a rate increase at the BOE’s last meeting even as his colleagues voted to hold steady.

“The longer we wait … from a risk management perspective I am more concerned about this embeddedness, the duration, the expectations.”

(Reporting by Howard Schneider)