BoE’s Mann: Energy price caps could be boosting other inflation

Participating in a panel discussion at the annual conference of the American Economics Association in New Orleans over the weekend, Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann spoke about the energy price caps and their impact on inflation.

Key quotes

“The caps on energy prices allow the reorientation of spending to the rest of the consumption basket and thus potentially higher inflation than otherwise would be the case in all those other products”

“That’s something we look at carefully.”

“What’s going to happen when the caps are removed?”

Will inflation kind of bounce back? What will the energy prices be at that time? We don’t know.”