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
Brazil boat sinks killing at least seven in Amazon region

Brazil boat sinks killing at least seven in Amazon region..

23-Aug, 12:50

At least seven people were killed when a boat carrying about 70...

WPP cuts growth forecast as second quarter sales slow

WPP cuts growth forecast as second quarter sales slow..

23-Aug, 04:10

Shares in WPP slid by 9% at the start of trading after the advertising...

US Navy 'to sack' Joseph Aucoin, Seventh Fleet commander

US Navy 'to sack' Joseph Aucoin, Seventh Fleet commander..

23-Aug, 03:20

The US Navy is to dismiss Vice Adm Joseph Aucoin as commander of the...

Danny Glover joins Airbnb to get more people of color to sign up

Danny Glover joins Airbnb to get more people of color to sign up..

23-Aug, 19:12

Danny Glover takes interviews at the premiere of "Complete Unknown." SAN...

The Note: Media Gets the Trump Treatment

The Note: Media Gets the Trump Treatment..

17-Feb, 07:38

Trump’s First 100 Days with SHUSHANNAH WALSHE Day No. 29 THE BIG...

The Latest: Kenya president says violent protests illegal

The Latest: Kenya president says violent protests illegal..

13-Aug, 09:40

The Latest on Kenya following its elections (all times local): 4:25 p.m....

Unfettered online hate speech fuels Islamophobia in China

Unfettered online hate speech fuels Islamophobia in China..

09-Apr, 23:59

The flood of angry anti-Muslim rhetoric on social media was the first...

The Latest: US: Errant strike killed 18 allied Syrian forces

The Latest: US: Errant strike killed 18 allied Syrian forces..

13-Apr, 09:40

The Latest on Syria (all times local): 4:30 p.m. The U.S. military says...