1 June 2023 - MPC’s Mann sees core inflation as a “continuing” issue for the UK
The MPC’s most hawkish member Catherine Mann made a speech yesterday in which she again raised concerns about the potential for inflation to become ingrained in the UK economy. Mann believes that the UK has a more significant issue with core inflation than most of its G7 partners. She said that it was a structural issue where companies, both public and private, are so desperate to protect their profit margins that they pass wage increases directly to their customers by increasing the price of their products. One classic example of this is the railways, which are supposedly privatized but the Government is currently engaged in a tough series of negotiations with several sectors of the industry. The UK has the highest train fares in Europe or the U.S., while its service is mediocre at best. The cost of a ticket bears little relationship to the distance travelled, the frequency of the service, or the condition of the rolling stock or infrastructure. Inflation in the UK reached a high of 11.2% in October last year and in April was still at 8.7% making the UK the joint highest, with Italy, in the developed world. Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.