LONDON (Reuters) – The Bank of England needs to ensure the current surge in energy prices does not feed into businesses’ longer-term pricing decisions, Monetary Policy Committee member Catherine Mann said on Tuesday.
“You only get inflation if businesses raise their prices. That’s where it comes from. It doesn’t come from wage settlements. It comes from businesses’ capacity to raise their prices in a systematic way and sustain demand,” she said.
BoE Governor Andrew Bailey has faced criticism from trade unions and some politicians for saying last month that workers should show restraint in their pay demands to avoid the current inflation shock turning into a more persistent one.
“When we think about the policy strategy it is very much a front-load to offset or counter inflationary expectations,” she added in an online discussion on inflation hosted by the Federal Reserve Bank of Cleveland.
(Reporting by David Milliken; Editing by William Schomberg)
