UK inflation less of a threat as corporate pricing power weakens, says BoE official

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Companies are fighting for rising prices this year, as consumers hit job losses, and soften the soft-center, the Central Bank claims that the Central Bank must reduce interest rates more aggressively.

Catherine Mann said last week to reduce Jumbo semester, due to weakening the job market and slowing down the demand for consumer demand, which, hence inflationary pressures.

In the past, Mann was the most important BOE policy Russia and was against the reduction of last year’s speed due to stable risks in inflation.

“The terms of demand are quite weaker than that happened, and I changed my mind about it,” Manin said. interview by financial times.

“I see the price is very close [2 per cent] Target-consistent [levels] In the coming year, “he added, warning that the data indicates in” nonlinear “employment.

Mann, a foreign member of the Boy Monetary Policy Commission, removed him from the “gradual” approach to the Central Bank to assess the reductions, saying that half a unit was needed to “cut noise”.

“As far as we can communicate what we think that the relevant financial conditions are for the British economy, a larger step is a excellent communication device, in my opinion, Mann said.

On Thursday, BOE announced a quarterly interest rate by 4.5 percent, but Mann and his partner Swat Dingra summed up both a large, half-point cut.

On Friday, Huu Hab, Chief Economist, opened himself, saying that he would not be “rushing” in a significant exchange rate.

While the Dingran was looking for a faster relief than most MPC, Mann had recently occurred at the opposite end of the spectrum.

In 2023, he called for up to 5.5 percent to a quarter point outside the increase in inflation growth.

He opposed the decision of the majority of MPC to reduce the key rate by 5%, and the only opponent of November to decrease it by 4.75%.

Despite the change in his position, Mann warned that last week his voting reflects his desire to change a one-time step than a longer-term legal succession of the continuous exchange rate.

BOE expects to eliminate inflation of consumer prices to 3.7 percent, due to the second half of this year, due to factors, including higher energy prices.

Mann said that the Central Bank must ensure that the growth does not agree to the companies who agree to accept higher salaries that could burn inflation.

“I have to ensure that these second round effects do not occur. And I will need some more data to make that decision, “Manin said.

However, Manny said that the British consumer weakens “lack of pricing force.”

Soft demand conditions “begin to bite” and undermine the capacity of companies that will pass in areas of expenses, including food, hospitality and vacations.

The companies whose working expenses will probably be changed by the decision to increase the minimum wage and employer’s national insurance payments at the same time, the intentions of “dramatically changed” employment.

This pointed out “non-linear adjustments to work demand,” he said. “Employees may want that salary increase, but firms will not be able to pay because they will not be able to pass it.”

Mann added: “If there is no non-linear adjustment in employment, which makes less demands because fewer people work. And then it leads to firm pricing force. “

Were weak demand was a reflection of continuous warning among consumers, despite the growth of real income, the adjusted salaries of inflation increased by 2.5% in September-November last year.

Last year, Mann said that he was suggested that high savings were “dry powder” that could have exhausted stronger, but it is not implemented.

Monday, the monthly survey of KPMG and the ARF Dashnaktsutyun has pointed out to The most common weakening Since 2020, in case of demand of the staff, the UK is guessing with a pandrik.