Bank of England Monetary Policy Committee member Catherine Mann spoke over the weekend.

As part of a panel discussion at the annual conference of the American Economics Association in New Orleans.

Mann argued that holding down the price of energy allowed consumers to spend on other goods an services:

  • “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.”

Mann continued, outlining concerns even when caps are removed:

Seems to be looking for worries. Sheesh. Surely if price caps are removed and energy prices bounce back higher, then consumer spending elsewhere and therefore inflation pressures on other goods and services would decline … that’d fit with the reasoning, yeah?

Bloomberg had the report, gated.

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