Bank of England's Mann doubles down on backing for rate hikes

BUDAPEST (Reuters) - Bank of England rate-setter Catherine Mann on Monday backed further increases in interest rates and warned that pausing, as some of her colleagues advocate, risked a confusing "policy boogie" if it turned out rates would need to rise again.

After raising interest rates to 4% last week, the BoE's Monetary Policy Committee (MPC) signalled it was close to pausing a run of interest rate hikes which began in December 2021.

Mann, consistently the most hawkish member of the MPC, said the risk of under-tightening policy would far outweighed the alternative.

"We need to stay the course, and in my view the next step in Bank Rate is still more likely to be another hike than a cut or hold," Mann said in a speech delivered to the Lamfalussy Lectures Conference in Budapest.

She criticised the idea of pausing the rate hike cycle at this juncture, a course of action that two of her MPC colleagues - Swathi Dhingra and Silvana Tenreyro - voted for last week.

"In my view, a tighten-stop-tighten-loosen policy boogie looks too much like fine-tuning to be good monetary policy. It is both hard to communicate and to transmit through markets to the real economy," Mann said.

(Reporting by Gergely Szakacs in Budapest, writing by Andy Bruce in Manchester; editing by Sarah Young and William James)

By Gergely Szakacs