Overview

• Swati Dhingra publicly argued the factors lifting UK inflation will fade and warned that keeping policy too tight risks harming growth.
• She dissented at the latest MPC meeting in favor of cutting the base rate to 3.75%, compared with the current 4%.
• Her analysis highlights sharp rises in administered or indexed services such as water bills and bus fares, which are less responsive to monetary tightening.
• Dhingra said rising wage bills explain most price growth in market-based services but a much smaller share in administered services, citing a 61% versus 27% split.
• The intervention underscores an MPC divide, with fellow external member Megan Greene calling for a cautious approach as the OECD projects UK inflation around 3.5% this year.