BoE’s Mann: Forward-looking indicators raising the risk of inflation persistence

• Forward-looking price and wage indicators have been flat and above target for four months, raising the risk of inflation persistence.
• Financial markets’ inflation expectations suggest the BoE will not get to a sustainable 2% inflation in the forecast horizon.
• Risks to inflation are almost all upside.
• I do not use gradual language on rate cuts.
• I prefer activist strategy on monetary policy.
• It’s important to keep rates on hold, and not pursue a gradualist strategy on rate cuts.
• The current stance on monetary policy is not particularly restrictive.
• Gradualism causes inflation persistence to drag on for longer.

This article was written by Giuseppe Dellamotta at www.forexlive.com.