Anna 
Catherine Mann, a policymaker at the Bank of England (BoE), remarked on Tuesday that “markets are pricing in too many cuts to rates.”
Mann elaborated on her stance, highlighting changes in consumer behavior disciplining firms’ pricing strategies, shifting dynamics in labor markets, and alterations in the financial market curve as factors influencing her decision to change her vote on rates.
She noted that discretionary services inflation has begun to soften in the past few months and observed an increase in firms reducing labor hours.
Mann emphasized that the reduction in national insurance rates will bring more workers into the labor market, potentially impacting wage dynamics in the near future.
Reflecting on her perspective in February, Mann expressed concerns about the markets easing too much and suggested that markets might be overly complacent about the BoE’s rate-holding stance.
She pointed out the significance of the market curve in the UK, which is influenced by decisions made by the European Central Bank (ECB) and the Federal Reserve (Fed).
Regarding wage dynamics, Mann stated that they are stronger in the UK compared to the US and the Euro area.
She concluded by suggesting that it is challenging to argue that the BoE would be ahead of the ECB and the Fed in terms of rate adjustments.
Market Reaction:
Despite Mann’s comments, the Pound Sterling showed limited reaction, with the GBP/USD pair struggling around 1.2650, maintaining a modest 0.13% gain for the day.
