Bank of England Governor Andrew Bailey emphasised last week that a 'gradual approach' is necessary when it comes to cutting interest rates(Image: PA Wire/PA Images)

Bank of England policymaker says she will 'move big' when ready to cut rates

Catherine Mann, an economist and member of the Bank's Monetary Policy Committee, has so far refrained from voting to cut rates

by · The Mirror

Bank of England policymaker Catherine Mann has stated that she's prepared to "move big" on interest rate cuts when it's clear that persistent UK inflation pressures have been eliminated.

Although the Bank’s Monetary Policy Committee has already voted to reduce rates in August and November, bringing the base rate down to 4.75%, Mann has resisted cutting just yet.

Speaking at the BNP Paribas Global Markets Conference, Mann explained her "activist" approach on the committee, stressing the importance of not allowing price rises to become entrenched in the economy after a period of high inflation.

Ms Mann declared: "Last vote, I chose to hold, as opposed to cut with the rest of the committee, because, in my view, there is outside risk to inflation, already embedded potentially going forward... and in that environment it is important to hold for longer."

She added: "And then, when I have evidence that there has been a removal or sufficient moderation of inflation persistence, then I will move at a bigger step."

The economist underscored the importance of monetary policy in influencing immediate pricing decisions by firms and affecting inflation expectations, which are "critical" in rate-setting, justifying her strategy by saying, "That is why part of my activist strategy is, when I move, I will move big."

Bank of England Governor Andrew Bailey emphasised last week that a "gradual approach" is necessary when it comes to cutting interest rates, allowing the Monetary Policy Committee (MPC) to evaluate different economic factors, including the Government’s tax plans.