Catherine L. Mann, member of the Bank of England's Monetary Policy Committee, says a 'persistent hold' on Bank Rate is appropriate right now to combat high inflation.
However, she believes there could be a case for "larger, more rapid Bank Rate cuts" in the future.
CPI inflation rose to an 18-month high of 3.8% in July, with the latest forecast from the Bank of England showing inflation peaking at 4% in September, up from its previous prediction of 3.7%, before falling back to the 2% target in early 2027.
During a speech given at The Future of Central Banking conference, Mann said: "A more persistent hold on Bank Rate is appropriate right now, to maintain the tight (but not tighter) monetary policy stance needed to lean against inflation persistence persisting.
"However, I stand ready for a forceful policy action, in the form of larger, more rapid Bank Rate cuts, should the downside risks to domestic demand start materializing. An activist policy strategy is needed to clearly communicate about the current and future path for policy, which will enhance the functioning of the monetary policy transmission mechanism, particularly in an environment of volatility in inflation and financial markets."
Mann previously explained the need to maintain "policy rate discipline and restrictiveness", even after voting for a 0.50% rate cut at the MPC's February meeting.
Speaking in February, Mann said she in the minority who believe that monetary policy "would need to remain restrictive for some time... and Bank Rate would likely stay high given structural persistence and macroeconomic volatility".
Despite Mann's views, recent research found that more than half of mortgage brokers (52%) say they expect at least two cuts before the end of February 2026.
