By David Milliken

LONDON (Reuters) – Bank of England policymaker Catherine Mann stated on Tuesday that her unexpected vote for a half percentage-point cut in interest rates last week did not imply her desire for a series of rate cuts, nor did it indicate she would vote the same way again in March.

Mann’s vote surprised investors, many of whom viewed her as an “uber-hawk”; however, her approach is better described as one of “activism”, as opposed to the gradualism preferred by most of the BoE’s Monetary Policy Committee.

In a speech, she maintained that a restrictive monetary policy remains essential and that the long-term equilibrium level of British interest rates is at the higher end of a 3.0-3.5% range, as indicated in a BoE survey of investors.

This stance contrasts with Swati Dhingra, the other Monetary Policy Committee member who supported the 50 basis-point cut and has consistently favored looser policy.

“Active doesn’t mean cut, cut, cut,” Mann expressed during a Q&A session following her address at Leeds Beckett University in northern England.

She explained that she had previously voted to maintain rates due to ongoing weaknesses in Britain’s economy contributing to inflation.

“Those structural impediments continue to be in evidence in this economy, and the notion that somehow (I support) ’50 now, 50 next time’ – that would not be a full reading of what I have just said,” she emphasized.

Despite this, Mann recognized that sufficient evidence of weak consumer demand, potential job market deterioration, and declining corporate pricing power led her to reconsider her position on rate cuts.

Voting for a half-point cut was the clearest way she could signal this to financial markets, she explained.

“I chose 50 basis points now, along with continued restrictiveness in the future, and a higher long-term Bank Rate to ‘cut through the noise’,” she said, rejecting the gradualist approach favored by most policymakers.

Last week, the BoE reduced its growth forecast for 2025 to 0.75%, while also predicting inflation would rise from 2.5% in December 2024 to around 3.7% by the third quarter of this year.

Mann stated her commitment to maintaining a restrictive stance on interest rates “ensures that, as we move through the inflation hump, (inflation) expectations remain anchored both in the near and longer term.”