BoE’s Mann Warns Inflation Persistence Intensifies Amid Weak UK Growth

Bank of England Monetary Policy Committee member Catherine Mann said research now points to greater persistence in UK inflation, warning that the central bank’s previously outlined upside scenario for price pressures is starting to materialise. Mann cited rising short- and long-term household inflation expectations—around 0.5 and 1 percentage point respectively above historic norms—as evidence that price dynamics are becoming more entrenched. Speaking at a Banco de México centenary conference, Mann added that the latest staff projections foresee headline consumer-price growth peaking at 3.8% in the third quarter of 2025 and staying above the BoE’s 2% target until at least mid-2027. While a downside risk to demand persists, she said it is not her central case; instead, the combination of sticky inflation and weak output growth is complicating monetary-policy decisions and may warrant a more persistent tight stance.