BoE MPC member Catherine Mann “The caps on energy prices allow the reorientation of spending to the rest of the consumption basket and thus potentially higher inflation than otherwise would be the case in all those other products… That’s something we look at carefully.”
“What’s going to happen when the caps are removed?” she asked. “Will inflation kind of bounce back? What will the energy prices be at that time? We don’t know.”
Mann was a hawk who voted for a 75bps rate hike at the December meeting. At the meeting, BoE decided to hike by 50bps in a 6-3 vote, with two members voted for no change.