Bank of England rate-setter sees inflation risk in robust demand
Businesses may take advantage of cheaper imports from China by keeping final prices for consumers high in order to rebuild profit margins, thereby fuelling inflation, a Bank of England rate-setter said on Wednesday.
In an interview with CNBC, Catherine Mann, an external member of the Bank of England's monetary policy committee (MPC), said that companies were still able to charge customers steep prices amid resilient demand in the UK economy.
With the possibility of lower prices for goods imported from Asia, especially from China, amid an escalation in global trade tensions, Mann suggested that companies may try to exploit larger price differentials between the cost of inputs and final prices charged to consumers to increase profits.
The former chief economist at the OECD said:
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