This week was the first time in more than a year that Mann voted to increase rates by less than half a percentage point.
"We are at a point where we have gotten ... quite a way towards what an appropriate tightening is," she said in an online panel discussion hosted by the University of South Florida. Many economists think that with its main interest rate now at 4.25%, up from 0.1% in December 2021, the BoE has come to the end of its tightening path. Financial markets still price in one more quarter-point rate rise for May or June. Inflation unexpectedly rose to 10.4% in February, but BoE Governor Andrew Bailey has said he expects it to fall sharply over the remainder of the year. Mann repeated her view that rapid, front-loaded rate rises were the best way to bring down inflation expectations and future inflation while minimising the impact on growth. A regular Bank of England survey of businesses, published alongside Thursday's rate decision, showed that firms expected inflation to be 5.6% in a year's time, down from 6.2% three months earlier, though still well above the BoE's 2% goal. "A key factor for me in agreeing with and also voting (with) the majority for a 25 basis point increase ... was that these forward-looking measures of price expectations ... had started to moderate, which is exactly the signal to me that my monetary policy is having an effect," Mann said. Two members of the BoE's Monetary Policy Committee (MPC) have voted since December to keep interest rates on hold, arguing that the economic outlook was weak and that past rate rises would be more than enough to bring down inflation. Mann said a bounce in retail sales data released earlier on Friday showed that the underlying economy remained solid. "Real retail sales for February were pretty robust - and so monetary policy can work through expectations, as well as through aggregate demand," she said. (Reporting by David Milliken and Suban Abdulla; editing by William James, William Maclean)
