You are here: Home - News -

Bank of England policymaker warns interest rate rise should not be delayed

by:
  • 26/06/2018
  • 0
Bank of England policymaker warns interest rate rise should not be delayed
Outgoing monetary policymaker Ian McCafferty has warned the Bank of England must raise rates soon or risk a more aggressive pace of increases later.

 

 

McCafferty was one of three members of the Bank’s Monetary Policy Committee (MPC) who voted to raise the base rate in June.

However, he is to be replaced on the nine-member rate-setting committee at the end of August and has used his final public speech before stepping down to urge action by the MPC.

The economy outlook calls for around three rate increase over the course of the next three years, McCafferty said.

He added: “That outlook, combined with the risks around it, also suggests that we should not dally in making the next move.

There is a significant chance that inflation will remain above 2% in two years, thanks to higher wages and rising energy prices, the policymaker suggested.

He added: “As a result, continuing with the slow reduction in monetary stimulus without undue delay could well prevent the need for a more aggressive tightening later on.”

Economic data over the coming weeks will be closely scrutinised by markets for clues over whether more members of the MPC will vote for a rate rise in August.

Ruth Gregory, senior UK economist at Capital Economics, said: “It’s unlikely to take much to sway the wavering MPC members to vote for an August rate hike.

“A solid set of Markit/CIPS surveys for June and some improvement in the upcoming industrial production and construction figures should be enough to tip the balance in favour of the hawks.

“Overall, we continue to expect rates to rise in August and again in November.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
Accord launches new mortgages for first-time landlords

Accord Buy To Let has expanded its offering for first-time landlords with the launch of two new mortgages.

Close