BoE MPC member Catherine Mann said yesterday that it’s “premature” to judge the extent of UK Prime Minister Liz Truss’s budget is going to affect “monetary policy trajectory decisions”.
“I people don’t have to spend their money on heating their apartments, or homes, they are now we’re in a position to redirect some of that spending on to other goods and services,” she added. “So it’s that ability to redirect expenditures on goods and services, that becomes an important consideration for the monetary policy trajectory.”
Mann also expressed her concern that inflation expectations are “drifting” away from BoE’s anchor. “I do see increasingly embedded inflation, I do see inflation expectations drifting, I do see a sterling depreciation spillover and I do see daylight between real incomes and real consumption possibilities,” she said.