MPC member calls for interest rates to rise

MPC member calls for interest rates to rise

UK interest rates should be raised, despite risks in the economy, according to a member of the Bank of England's rate-setting committee.

Kristin Forbes, a US academic, was the only member of the Monetary Policy Committee to vote to raise rates this month.

This was the first split between policymakers on rates since last July.

"Monetary policy should not go on hold," Ms Forbes wrote in an opinion piece in the Daily Telegraph.

Ms Forbes, who is due to leave the Bank in June, said raising rates would lessen the risk of above-target inflation, and boost an improved outlook for unemployment and UK output.


Official data on Wednesday showed UK pay growth, adjusted for inflation, halved to just 0.7% - the lowest since October 2014.

But Ms Forbes said that recent weakness in wages growth probably reflects temporary caution about Brexit among employers.

The majority of MPC members saw signs of slowing consumer spending as one reason for caution on interest rates, but Ms Forbes said this should be seen in the context of strong levels of consumption in recent months.

"This softening ... should only be moderate, due to support from resilient consumer confidence, solid house prices, low unemployment, and easy access to cheap credit," she said.

"There are risks consumers could pull back more sharply - but these are still just risks."

Although the UK economy faces a long list of risks including slowing growth, she said these "will continue for years" and should not deter policymakers from making "nimble" decisions.



Add Comment

all comments

  Other news

more
Glastonbury to open with minute's silence

Glastonbury to open with minute's silence..

23-Jun, 01:51

The Glastonbury Festival will open with a minute's silence on Friday...

How debt yes, debt  can help you jumpstart your business

How debt yes, debt can help you jumpstart your business..

22-Jun, 14:54

Debt can help a business thrive. It can be used to your advantage if you...

UK terror attacks: Home secretary says police stretched

UK terror attacks: Home secretary says police stretched..

22-Jun, 13:27

Terror attacks in the UK over the past three months have left police...

Hugh Grant offers ?1,000 for return of WW2 veteran's medals

Hugh Grant offers ?1,000 for return of WW2 veteran's medals..

23-Jun, 09:06

Hugh Grant has offered a ?1,000 reward for the return of a blind WW2...

I Live Alone Episode 195

I Live Alone Episode 195..

03-Mar, 23:59

The following I Live Alone Episode 195 English Sub has been released....

Senate conservatives: Ease Obama health care law protections

Senate conservatives: Ease Obama health care law protections..

11-May, 20:02

Conservative senators are pushing to diminish insurance coverage...

This is peak investing: Stocks, bonds and concerns are up

This is peak investing: Stocks, bonds and concerns are up..

15-Jun, 03:09

Everything is awesome for investors. Everything. Stocks are at peak...

Tropical storm forms off Mexico, takes aim at Oaxaca coast

Tropical storm forms off Mexico, takes aim at Oaxaca coast..

01-Jun, 14:21

Tropical Storm Beatriz formed in the Pacific Ocean and soaked parts of...