Bank of England’s Mann says fall in inflation pressure has long way to go

WASHINGTON (Reuters) -Bank of England interest rate-setter Catherine Mann welcomed a recent fall in inflation in Britain but said the cooling of price growth still had “a long way to go” for the central bank to hit its 2% inflation target over the medium term.

“Our headline price print … was lower than projected in the August Monetary Policy Report. Services, which, of course, we have looked at very carefully for persistence, came in under 5% for the first time in a very, very long time,” Mann said.

“A little bit of a concern, goods prices are a little bit higher. In order to get to a target consistent (with a) 2% inflation rate, services still have a long way to go,” she said in a panel discussion on the sidelines of meetings of the International Monetary Fund in Washington.

Mann voted against the BoE’s quarter-point cut to borrowing costs in August.

Asked during the panel discussion about her stance on rates now, Mann said: “If you have structural persistence in the relationship between wages and price formation that lasts, that is persistent and embedded, then it’s premature to start cutting until you purge those behaviours.”

Investors are pricing a roughly 88% chance of another 25 basis-point rate cut by the BoE at its November meeting.