Katherine Mann, a member of the Bank of England’s Monetary Policy Committee, acknowledged the UK’s recent decline in inflation. Mann said that while this development was viewed as positive, there was still a long way to go to reach the central bank’s target of 2% inflation in the medium term.
Mann pointed out during a panel discussion at the International Monetary Fund meeting in Washington that the latest headline inflation rate turned out to be lower than expected in the August Monetary Policy Report. He noted that service sector inflation has fallen below 5% for the first time in a long time, indicating a significant change in the inflation outlook.
But Mann also expressed concern that commodity prices were slightly higher than expected. He stressed the importance of achieving inflation balance between goods and services to achieve the central bank’s goals. While curbing inflation in the services sector is a step in the right direction, Mann says the sector still has a long way to go to reach the 2% target.
Mr Mann’s comments reflect the continuing challenges faced by the Bank of England as it navigates complex monetary policy against a backdrop of fluctuating inflation rates. The central bank continues to monitor various economic indicators, including prices of goods and services, to guide decisions on interest rates and other monetary policy tools to stabilize the economy and achieve the inflation target.
Reuters contributed to this article.
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