Bank of England policymaker Catherine Mann said on Thursday that the consequent embedding of current overall inflation into firms' own-pricing is a concern because it may point to a situation in 2023 where pricing remains robust even as demand remains weak, reported Reuters. 

Additional Remarks:

The BoE's remit recognises that shocks will push inflation away from 2% and that appropriate monetary policy can temporarily tolerate such a deviation. 

These days, there is uncertainty at all horizons and among all relationships, and, of course, shocks continue to affect both financial intermediation and the real economy. 

"I am watching surveys and other data closely to see whether and when firms receive the demand signal that would alter their pricing expectations."

If the consumption hit is moderated by other policies or by savings and other smoothing behaviours, it may be well into 2023 before firms receive the demand signal.