LONDON (MNI) – Bank of England Monetary Policy Committee member
Andrew Sentance has continued to make his case for higher interest
rates, with an opinion piece in the Times newspaper published Monday.
Sentance, who has voted at the last four meetings for a 25 basis
point rate hike, restated his arguments for tighter monetary policy in
the Times piece.
“Inflation is becoming a worry,” he says in his op-ed piece.
“For about five years, with the exception of a few brief episodes,
consumer price index inflation has been running above its 2.0% target
… With another rise in VAT coming through in the new year, above
target inflation is likely to persist into 2011,” he says.
Sentance says there is little risk of a return to double digit
inflation with the UK enjoying a monetary policy framework that has
built confidence in low and stable inflation.
“This confidence must not be eroded by a perception that the MPC is
becoming more tolerant of high inflation,” he says.
He warns the MPC’s credibility “risks being eroded if it continues
to run at a relatively high level.”
“By starting a gradual adjustment of monetary policy, we can
reduce the risk of a sharper and more abrupt rise in interest rates
later on,” he says.
–London newsroom: 00 44 20 7862 7499;e-mail: ukeditorial@marketnews.com
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