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Global central banks will diverge on the way they respond to inflation this year, creating risks to economies everywhere, Bank of England policy maker Catherine Mann said.
Drawing on research by Bloomberg Economics' Stephanie Flanders, Mann said that inflation was clearly above target in the U.S. and U.K., though not yet in the euro area. She said that central banks were facing different requirements with regard to responding to that surge.
“Those differences in strategies responding to the inflationary surge is going to generate its own global spillovers,” Mann, Citigroup Inc.'s former global chief economist, told a web event hosted by the European Investment Bank. “And this is going to be particularly important feature of the 2022 economic experience.”
The BOE expects inflation to surpass 6% this year, triple its target, while it hit a 39-year high of 7% in the U.S. last year.
Read more:
- U.S. Inflation Hits 39-Year High of 7%, Sets Stage for Fed Hike
- Euro-Area Inflation Unexpectedly Hits Record in Test for ECB
- The Energy Price Surge Is Squeezing Europe's Economy
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