Britain has a bigger inflation problem than the United States or the euro zone, with both large headline price rises and growing signs of persistence in underlying pressures, Bank of England policymaker Catherine Mann said on Wednesday.
Mann, who has been the BoE's keenest advocate of interest rate increases since she joined in 2021, also saw a risk of future financial market volatility as the global economy adjusts to higher borrowing costs.hit a 41-year high of 11.1% in October and in April, at 8.7%, was the joint highest alongside Italy's among the world's big advanced economies, sparking a sell-off in bond market as investors bet on more BoE rate rises.
Mann said core inflation was showing signs of being kept high by British businesses' ability to push through price rises, as well as increased wages, while headline inflation had also been slower to fall back towards the core rate than elsewhere. "There is a gap between the headline, which is incorporating energy which went up really high and now has come down, and core where we do start to see the implications coming through pricing channels, through wage negotiations, into something that is persistent," she added.
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