LONDON (MNI) – The Bank Of England’s Monetary Policy Committee needs
to start raising interest rates from their current extremely low level,
a leading policy maker says in an interview published Wednesday.
In an interview with the Reading Post, MPC member Andrew Sentance
said:
“Over a period of time we need to reassess the amount of support the
recovery needs. We need to start a process of moving interest rates up
from what is an extremely low level.”
Reiterating comments he made in a speech Tuesday, Sentance again
laid the blame for his recent vote to increase Bank Rate on the
continued stickiness of inflation.
“A reason for that is inflation hasn’t turned out to be as low as
expected,” he said.
Sentance voted to raise rates by 25 bps to 0.75% at the June
meeting, the only member to vote for a hike, and the first MPC member to
vote for a rise since the summer of 2008.
Sentance also told the Reading Post that the economy was in a
better position than 12 months ago, although not everything had
dramatically improved.
“My point was that while not everything has dramatically improved
in the economy, things are a lot better than where they were a year
ago,” he said.
Last week, the Bank’s MPC again voted to leave rates unchanged at
0.50%, maintaining rates at the lowest level in 300 years. The minutes
of that meeting are released on July 21, when it will become apparent
whether Sentance again voted for a hike and whether or not he was backed
by other MPC members.
In recent public comments, however, other MPC members have
stressed the continuing downside risks to the recovery.
–London newsroom: 00 44 20 7634 1655; e-ml: ukeditorial@marketnews.com
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