Bank of England interest rate-setter Catherine Mann voted to keep rates on hold because the UK labour market is more “resilient” than expected.  

The Monetary Policy Committee external member pressed to keep rates unchanged – after a vote for a half-point reduction in February – as wages rose and unemployment was little changed. 

“The first observation is that the labour market has been more resilient. Now, yes, we’ve had some prints that are indicative of a slowing labour market, but it is not a non-linear adjustment,” Mann (pictured) told CNBC television.

The nine-strong committee cut the base rate by a quarter point to 4.25% last week, the second reduction of the year and the lowest level since May 2023. 

Mann and Bank chief economist Huw Pill voted for no change, while external members Swati Dhingra and Alan Taylor supported a half-point cut. 

The Bank also lifted its forecast for the UK economy to grow by 1% this year, marking an upgrade from the 0.75% growth predicted in its February report.   

Regular earnings, which exclude bonuses, grew at an annual pace of 5.6% in the first three months of the year, according to the Office for National Statistics last week. 

While the unemployment rate rose to 4.5% in the January to March period, up from 4.4%. 

However, the ONS has said its unemployment figures should be treated with caution because of low response rates to the survey on which they are based. 

Mann told CNBC that the prices of goods at Britain’s borders may fall due to higher trade tariffs imposed by the US on China, which could cause exports to be diverted to countries such as Britain. 

But retailers would probably look to rebuild their profit margins which could keep pressure on consumer price inflation, she said. 

An agreement on Monday made by the world’s two largest economies will see the US lower tariffs on China from 145% to 30%, while China’s retaliatory tariffs on US goods will drop to 10% from 125%.

Mann said: “I need to see the loss of pricing power. I need to see that firms are starting to be much more moderate in setting their prices across a broad range of products. “Goods price inflation is actually going up, not down.” 

Dhingra, who has consistently voted for lower interest rates to support the UK’s subdued economy, is due to give a speech on Thursday.