Bank of England Monetary Policy Committee member Catherine Mann said on Tuesday that the newly discovered Omicron variant raises particular question marks over consumer confidence and may alter the rotation to service spending from spending on goods, according to Reuters. Omicron could leave us in a situation where there is more slack demand for consumer services, she added. Mann did not directly comment on how the Omicron variant impacts the outlook for gradual, expected BoE monetary tightening in the coming months/years.

On inflation expectations, Mann added that the bank remains confident that inflation expectations remain well-anchored. 

Market Reaction

GBP has not seen any reaction to the comments, which did not tough on BoE monetary policy.