BoE rate setter Mann: Inflation 'gaps' make achieving 2% target sustainably 'elusive'

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Bank of England rate setter Catherine Mann said "gaps" in inflation data raise concerns about price growth persistence and upside risks, making achieving the 2% target sustainably and within the forecast time horizon “elusive”.

Mann, an external member of the BoE's Monetary Policy Committee, said during a speech on Thursday (8 February) that these gaps come from energy prices, the evolution of goods versus services inflation, and asymmetric behaviour of firm pricing. "In the February forecast, headline inflation dips to 2% in early 2024, but only briefly. Stripping out the energy contribution to CPI inflation shows a much slower deceleration," she said.  "Without energy contributions, inflation in fact never reaches the 2% target within the next three years. [...