Bank of England monetary policymaker Catherine Mann said interest rates would probably have to go up “a little bit” further, and that in some ways Britain’s economy was already suffering from stagflation.
“We want to avoid inflation getting out of control. And it may mean that interest rates go up a little bit. We’ll just have to see where we are in May,” Mann said in a question-and-answer session after delivering a speech on Thursday.
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Asked about the risk of stagflation – a combination of slow growth and high inflation – Mann said “in some senses, we could say we’re already there” because of the jump in energy prices and slowing retail sales.
“But I think that, you know, it’s premature to kind of hearken back to the 1980s or the 1970s, in the U.S. context in particular, and use that vocabulary,” she said.
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