Don't succumb to greedflation, Bank rate setter warns companies

Businesses will need to show they are keeping a lid on prices before there can be further interest rate cuts, a Bank of England rate-setter has said.

- Phillip Inman

In a warning to retailers and consumer goods companies to resist pushing up prices by more than the increase in their costs, Catherine Mann said she was wary of firms looking to rebuild their profit margins after a squeeze in recent years.

"I need to see the loss of pricing power, I need to see that firms are starting to be much more moderate in setting their prices," she said.

Mann, a former chief economist at the Organisation for Economic Co-operation and Development, was one of two policymakers who voted to hold interest rates at 4.5% at a meeting of the Bank's monetary policy committee last week. A majority of five members voted to cut the rate by a quarter point to 4.25%, while two voted for a steeper half-point reduction.