Catherine Mann suggests keeping interest rates at 4% to combat inflation. Britons, scarred by high inflation, are saving more, leading to a flatlined household spending. Rachel Reeves faces challenges with tax rises and a slowdown in consumer spending. UK household savings ratio has risen to 12%. Inflation peaked at 11.1% in Oct 2022 due to energy and food price hikes. Mann expects inflation to peak at 4% in September and fall to 2.6% by end of 2025.UK households are changing consumption behavior due to persistently high inflation.

Read more at Yahoo Finance: ‘Scarred’ Britons are afraid to spend, says Bank of England official