Proactive Investors - UK interest rates should be kept on hold until inflation risks are more fully under control, Bank of England Catherine Mann has said in a speech.
Mann, who was the only member of the monetary policy committee who voted to keep interest rates on hold at the last meeting, warned that Donald Trump's return to the White House is likely to have inflationary consequences on this side of the Atlantic.
"In the face of uncertainties about the outlook for inflation and output, waiting buys time to learn more about developments, to make a better assessment of whether the inflation risk has subsided sufficiently to justify changing the policy stance," Mann said in a speech at the Society of Professional Economists' annual conference, per Reuters.
"In the current context, an activist stance holds the policy rate firmly until sufficient evidence on diminished inflation persistence is revealed; and then to move forcefully."
Mann said international trade policies, such as Trump's proposed tariffs, could have "damaging economic effects and increase volatility" in Britain.
"The latest political developments across the Atlantic have not made a disorderly trade scenario less likely, which would have consequences for output and inflation in the UK," she said.
Trump, whose inauguration will be on 20 January 2025, has said he will "make heads spin" with the speed of his changes after he takes office again, with the imposition of many of the policies he has proposed not needing Congressional approval.
As the Republican party has won control of Congress and the House, Trump will have the power to push through most of his policies quickly and largely unchallenged.