Bank of England rate setter Catherine Mann warned on Tuesday that UK firms are continuing to raise prices, driving up UK inflation, despite the price of gas and imported goods falling.
The trend, dubbed 'greedflation' in the US, occurs when companies exploit a crisis by uniformly jacking up prices.
Mann told Bloomberg TV she is concerned by the strong pricing power exhibited by firms, which many consumers have been willing to pay.
She is worried as to the extent to which firms have strong pricing powers, and the acceptance of those higher prices by many consumers.
“Even in the face of the cost of living crisis there are still a lot of people out there who are willing to pay higher prices, and firms are willing to set their prices high,” she commented.
Moving on to house prices and Mann said recent falls need to be put in context.
She pointed out prices have “appreciated dramatically” over the last couple of years creating a wealth effect which has only been slightly eroded by falls in prices since last summer.
Mann said: “We have to take into account what the starting point was, as well as the dynamics of the current pricing.”
Mann also highlighted supply issues in the UK economy will limit how much it can grow.
It is "really is striking how slow growth is in the UK," she said. "We did a supply stock take that we outlined in our monetary policy report for the February edition and it really is striking how slow growth is in the UK."
"It is much slower than what we observed for the US and euro area," she noted. Brexit "is a factor" on both the supply side and pricing power, she added.
She suggested the market could be in a “revival” rather than continuing to fall, noting the reduction in mortgage rates from the high point last autumn, and the increased competition with various lenders launching new mortgage products.
Mann also warned that over-50s who retire early will have to return to the workforce to top up their pensions. She suggested people retiring at the age of 55 faced a challenge to make sure their retirement savings "match your longevity".