BoE MPC member Mann says wage and price inflation are sticky downwards

<p>Bank of England Monetary Policy Committee member Catherine Mann is giving a talk in Dallas on inflation dynamics.</p><ul><li>says wage and price inflation are sticky downwards</li><li>going forward the length of time inflation remains above target will be important given that inflation expectations tend to drift</li><li>possible drift in expectations implies that policy has to be more aggressive </li></ul><p>Dunno about you but I am reading these comments and classifying them 'as clear as mud'.</p><p>Here we go, this clears it up:</p><ul><li>The longer inflation remains above target the more aggressive central bankers need to be in reacting to it</li><li>policymakers need to address not just high inflation today but the risk of rising expectations in the future</li><li>policy "has to be more aggressive because it has to address both a drift in expectations as well as the actual inflation" </li><li>The longer we wait … from a risk management perspective I am more concerned about this embeddedness, the duration, the expectations."</li></ul><p>Mann was in favour of a rate hike at the most recent Bank of England Monetary Policy Committee meeting.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.