A senior Bank of England policymaker has cautioned that elevated inflation is no longer a temporary problem for the UK economy but has become embedded in its structure — a warning that signals the central bank’s fight against rising prices is far from over.
Catherine Mann, an external member of the Bank of England’s Monetary Policy Committee, has said that high inflation has become entrenched in the UK economy. The remarks carry weight because they suggest price pressures are no longer driven purely by external shocks — such as energy costs or global supply disruptions — but have taken hold in wages, services, and everyday business behaviour.
When inflation becomes “embedded,” it means households and businesses begin to expect prices to keep rising, and they act on that expectation. Workers push for higher pay to protect their purchasing power. Businesses raise prices to cover rising costs. That cycle can keep inflation elevated long after the original cause has faded — and it is one of the hardest problems a central bank has to break.
The Bank of England has raised interest rates significantly since inflation began climbing, making borrowing more expensive in an effort to cool spending and bring prices back down toward its 2% target. Mann’s comments suggest she believes that process has more work to do. Policymakers who share that view tend to favour keeping rates higher for longer, or even pushing them further up, rather than pivoting quickly toward cuts.
This puts the Bank in a difficult position. Higher rates slow inflation but also weigh on economic growth, household finances, and the housing market — all of which are already under strain in the UK. The tension between fighting inflation and avoiding an economic slowdown is a challenge the Bank of England shares with many of its peers, including the European Central Bank and the U.S. Federal Reserve.
Mann’s warning adds pressure to an already complicated policy outlook. Markets will be watching future Bank of England meetings closely to see whether her hawkish tone — favouring tighter policy — reflects a broader shift in thinking among committee members.
The next Bank of England rate decision will be a key test of whether Mann’s view that inflation is now structural has gained ground among the wider committee.
