Bank of England rate-setting official Catherine Mann said the labour market is "static" rather than loose, while warning that inflationary pressures are becoming entrenched.

Speaking on Tuesday, Mann said she is concerned about upcoming wage negotiations, at a time when the Bank of England expects rising fuel and energy costs to push inflation "significantly above" 4% early next year.

Although Bank of England officials have taken some comfort from a weak labour market, believing it helps restrain wage growth, Mann is less reassured. She said the UK is in a "low-hiring, low-firing environment."

"I don't see this as a loose labour market; I think it's somewhat static," she said at a TS Lombard capital markets event in London.

"The underlying slack comes from new entrants to the labour market, and I don't think they are sufficient to really turn it into a loose labour market."

Mann is one of the most hawkish officials on the Monetary Policy Committee and has consistently argued that rate hikes are needed to stop the energy shock from spilling over into the broader economy. Although she was among the minority supporting an immediate rate increase last month, more officials have since hinted that the longer the Middle East conflict persists, the harder it will be to avoid raising rates.

The Bank of England is trying to determine whether the energy shock will trigger second-round inflation effects, namely businesses passing on higher costs and workers seeking higher wages.

Mann said that despite low vacancy levels, she remains worried that the wage channel will keep inflation persistently above the Bank of England's 2% target.

"They will begin negotiations with inflation above 4% and likely having just experienced a bad Ofgem energy price increase," she said, referring to the quarterly cap on UK household gas and electricity bills.

She also pointed to the possibility of another significant increase in the UK minimum wage, which businesses could pass back to consumers through higher prices, and said another 40% of the workforce negotiates "in a somewhat union-like way."

She said workers are most concerned about the cost of living.

She said there is an "upside bias" to UK inflation, and delaying rate hikes would make the task of returning inflation to target doubly difficult. If inflation ultimately proves milder than feared, policymakers can always "pivot" at any time.

She warned that inflation has already become "entrenched."

Mann said that despite the energy shock, the real economy remains resilient, and the main risk is that if households expect price increases to remain persistently high, they may increase their savings buffers to protect purchasing power.

Although Mann remains concerned about near-term inflation, she noted that businesses are adapting to the energy shock, making the economy less exposed to further price spikes.

"They are actively investing in shifting energy production, such as moving from gas to wind and solar," she said.

"You will also ultimately be less exposed to the volatility of energy shocks in the future, and that is how the real economy changes its behaviour in the face of energy volatility."