Bank of England policymaker Catherine Mann said on Thursday that she would be ready to vote for a rate rise if higher inflation expectations make it less likely that inflation will return to its 2% target.
"If outturns – especially in expectations – are unfavourable to the underlying inflation process, an activist move can bring inflation expectations and outcomes toward the two percent target," Mann said in a speech text released by the BoE ahead of an event hosted by French bank Natixis.
"Given the seasonality of wage negotiations and their dependence on previous inflation and inflation expectations, data outturns — including the expectations for one-year-ahead — in the second half of this year are particularly important for my future decisions," she added.
Mann voted to keep interest rates on hold at 3.75% last month as part of a 7-2 majority on the Monetary Policy Committee but viewed upside inflation risks as more prominent than the other members who voted to keep rates on hold.
In minutes of the decision, she also said rates could need to rise in future if there was a "sporadic continuance" of conflict between the United States and Iran that led to a new increase in energy prices after the recent fall.