LONDON (MNI) – Bank of England Monetary Policy Committee member
David Miles said a wide range of people have seen declines in their real
incomes and high inflation has created an extraordinarily difficult
situation.
In the interview with BBC Radio Cumbria Miles denied, however, that
businesses were calling for higher interest rates to tackle the
inflation problem and to boost savings rates.
“I’m acutely aware, that the inflation rate is close to 5%, above
5% at the moment. That’s an extraordinarily difficult situation. Pretty
much everybody has seen their income decline very sharply over recent
years,” he said.
“We’re emerging from a very, very deep recession and to try and
keep the level of demand and supply of credit going. We’ve set interest
rates at really extremely low levels and indeed at the Bank of England
we’ve gone beyond that,” Miles said.
Miles said the MPC had relaunched quantitative easing to boost
money supply and keep demand up in the economy. He was asked about
business urging the Bank to tackle inflation and up rates.
“There’s very little pushback from people saying ‘actually what we
need is higher interest rates,’ most companies recognise it’s a very
stressed situation they’re in and most households recognise that their
income has been really badly squeezed. Most people think that the last
thing they need if they’re a company and they’ve got borrowing out there
is to see the interest rate go up,” Miles said.
The MPC members are on a regional tour of the north west at
present, and have been giving a series of interviews to local media in
the wake of the committee’s decision to sanction an additional stg75
billion in quantitative easing given that inflation reached over 5%
in September.
–London newsroom: 4420 7 862 7491; email: ukeditorial@marketnews.com
[TOPICS: M$B$$$,M$$BE$]
