LONDON (MNI) – Bank of England Monetary Policy Committee Member
Andrew Sentance has again called for gradual increases in Bank Rate in
order to tackle persistent above-target inflation.
In an interview with the Manchester Evening News newspaper,
Sentance said that he still believed that rates should rise to counter
high inflation.
“We are coming up to another meeting of the MPC in May and I
wouldn’t say anything we have seen since the last one changes my basic
position that there should be a gradual raising of rates,” Sentance
said.
“That often gets described as a ‘hike’ but the largest I have
argued for is an increase of 0.5%,” he said.
“We need to make a distinction between interest rates being low,
which they need to be, and keeping them exactly as they were in the
depths of the recession,” he added.
Sentance also said that the manufacturing sector of the economy is
performing well but warned that the services sector is suffering from
squeezes on disposable income,” he said.
“One message I have picked up from people I have spoken to while in
Manchester is that manufacturing seems to be doing quite well and that
is consistent with the national picture,” he said.
“However, the service sector is more of a mixed picture and that is
not helped by some of the squeezes on disposable income and the rise to
VAT,” he said.
“Having said that, what I would say is the view I got was that the
economy is recovering, even though in some areas it is recovering slower
than others,” he said.
Last month’s MPC minutes show Sentance again voted for a 50bps hike
in Bank Rate.
–London newsroom: 00 44 20 7862 7492;e-mail: ukeditorial@marketnews.com
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