Bank of England (BoE) policymaker Catherine Mann said on Monday that the gradual pace of increase in bank rate has not tempered expectations enough, as reported by Reuters.

Additional takeaways

"Fast and forceful tightening potentially by a hold or reversal is superior to a gradualist approach."

"Long-term expectation metrics apparently remain anchored and consistent with the 2% target."

"Credibility of monetary policy is intact."

"Drift in medium-term expectations is already apparent in the data."

"We cannot be complacent in the face of the short-term spikes and medium-term drift."

"Acting more forcefully now is designed to avoid depending on a deeper and longer contraction."

"If current wholesale energy prices are allowed to be passed on to households and firms, this will lead to enormous pain for millions."

"Monetary policy is a relatively blunt instrument and is ill-equipped and not intended to deal with large relative price movements like the one we’re seeing currently."

"Ratcheting-up from short-term to medium-term expectations has been apparent for a while, and could portend a persistent drift higher."

"This has the potential to cement expectations inconsistent with the 2% target which would necessitate a persistently tighter stance of monetary policy."

"We will not tolerate a persistent inflation overshoot and will stay vigilant even when headline rates start to come down."

"The more we control medium-term inflation expectations now, the less tight for long monetary policy will need to be."

Market reaction

GBP/USD showed no immediate reaction to these remarks and was last seen trading flat on the day at 1.1505.