BOE's Mann Backs Rate Rise to Tame Inflation

By Paul Hannon

The rise in bond yields over recent months is unlikely to cool the U.K. economy enough to tame inflation, Bank of England rate setter Catherine L. Mann said Thursday.

The BOE last month left its key interest rate at 3.75%, although investors expect to see an increase to 4% in November. The U.K.'s annual rate of inflation rose to 3.1% in August from 2.9% in July, well above the BOE's 2% target.

Some of the Monetary Policy Committee's nine members have pointed to higher yields on government bonds as a development that reduces the need for a move by the BOE.

However, Mann said she drew little "comfort" from the increase in yields, an indication that she is likely to again vote for an increase in the key rate when the MPC meets next month.

"In my view, real financial conditions are insufficiently tight," she said. "The appropriate response is to reduce inflation risk and policy uncertainty through a clearly communicated reaction function and a sufficiently restrictive path for Bank Rate."

Write to Paul Hannon at paul.hannon@wsj.com

(END) Dow Jones Newswires

October 01, 2026 08:38 ET (12:38 GMT)