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Mann voted against this month's cut in interest rates and said
in the Financial Times podcast that she put her hawkishness at 7
out of 10, down from 10 out of 10 earlier this year when she
voted to raise rates further from their 16-year high of 5.25%.
"There is an upwards ratchet to both the wage setting process
and the price process and ... it may well be structural,
having been created during this period of very high inflation
over the last couple of years," she said.
"That ratchet up will take a long time to erode away," she
added.
British inflation returned to its 2% target in May but data this
week is likely to show it rose back above it to 2.3% and the BoE
has forecast it will reach about 2.75% later this year as the
effect of last year's fall in energy prices fades.
Mann said she saw upward pressure on wages from the fact that
wages had risen fastest for the lowest paid, compressing pay
scales and creating a potential demand over the coming years
from better-paid workers to restore the earnings premium they
previously enjoyed.
Britain's new Labour Party government has said it will continue
the previous Conservative government's goal - achieved last year
- of keeping the minimum wage at two thirds of median earnings,
one of the highest in the world.
Some businesses too would seek to match competitors' past price
rises and solid demand also meant they would feel less pressure
to pass on cost savings from recent strengthening of sterling,
she added.
Figures out on Monday from the Chartered Institute of Personnel
and Development showed that employers expected to raise pay by
3% over the coming year, the lowest amount in two years and
below the 4.1% in a similar BoE survey.
(Reporting by David Milliken in London, Harshita Meenaktshi in
Bengaluru; Editing by Kim Coghill and Sarah Young)
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