Catherine Mann, one of the nine members of Threadneedle Street’s monetary policy committee, said she was concerned about the ability of firms to take advantage of consumer willingness to tolerate higher prices.
The Bank of England has been closely monitoring pay levels for signs of a developing wage-price spiral but Mann’s comments reflect growing anxiety about the risk posed by corporate greedflation – where businesses more than pass on higher costs to customers – although she did not use that specific term. The European Central Bank expressed similar concerns last week.
The headline rate of inflation has come down slightly from a peak of 11.1% to 10.1%, according to the latest official figures, but Mann said she was more focused on core inflation – which strips out items such as food and fuel.
The rate setter said she was particularly “concerned about the extent to which there is strong pricing power among firms and acceptance of those price rises by a lot of consumers”. Even in the face of the cost of living crisis, Mann added, there were “still a lot of people out there who are willing to pay higher prices, and firms are willing to set their prices high”.
Read more at The Guardian
