Central banks like the Bank of England will find it hard to communicate the end of their rate-tightening cycle and should not sweat over this at the expense of taking steps to bring down inflation, BoE policymaker Catherine Mann said on Monday.
"Fine-tuning is something that monetary policy is not very good at if the ultimate objective is to focus on inflation," Mann said at an event hosted by U.S. political strategists Signum Global Advisors.
"I called it a policy boogie ... you hike, you cut, you hold and you're just kind of giving signals that are hard to determine and hard for the market to understand why you're doing it," she added.
Mann declined to be drawn in a question-and-answer session on whether financial markets were right to expect a steady series of further rate rises from the BoE which would take interest rates to 5.5% from 4.5% currently.
UK interest rate expectations jumped after April inflation data fell less than expected, and showed bigger rises in food prices, services and some goods than the BoE had expected.
Many economists, by contrast, expect the BoE to stop sooner - or if not, to pause to assess the impact of the rapid series of rate rises.
Last week the Bank of Canada surprised many investors by raising rates, after keeping them on hold since January, and the BoE will announce its next rate decision on June 22.
Mann was a keen supporter of rate rises last year - often voting for bigger increases than other members of the Monetary Policy Committee - but said she drew some comfort from the fact that household inflation expectations were now falling.
"Inflation expectations, in fact, are on the downswing even as some of these core and services prints have been more robust than we would have hoped for," Mann said.
However, she said these expectations were still too high to be consistent with inflation returning to its 2% target, and last month said Britain appeared to have stickier inflation than the United States or the euro zone.
MPC member Jonathan Haskel - also one of the more hawkish members of the committee - wrote in a newspaper article published on Monday that the BoE still needed to push back against the risk of high inflation becoming entrenched.
Economic activity had also continued to grow modestly and in line with expectations, Mann added.
"One percent growth, no matter how you cut it, is not a great rate of growth. It's not a recession, but it's also not the kind of strong growth that we would hope to see," she said.
