Andrew Sentance again calls for interest rate rise
Andrew Sentance has again gone public on his call for an increase in UK base rates to offset the ever-growing threat of inflation, which remains stubbornly high. This is one member of the MPC committee who has repeatedly highlighted the threat of inflation and the potential problems in the future if this issue is ignored in favour of straightforward fiscal stimulus programs. But why does Andrew Sentance feel so strongly about UK base rate?
There is a growing debate as to whether the Bank of England's refusal to attack inflation in the short to medium term, despite the fact it remains uncomfortably high, could impact upon the Bank's long-term reputation and ability to rein in prices. However, finding a balance between increasing interest rates, attacking inflation and also injecting confidence back into the economy is a very difficult balancing act the likes of which the Bank of England and the MPC has never seen before.
Over the last few months there has been a definite split in the MPC and despite the fact that UK base rates remain at 0.5% there is still great conflict within the confines of the Bank of England. If inflation is left unattended for a prolonged period of time, while the Bank of England looks to inject confidence and capital into the UK economy, what damage will have been done by the time the UK economy is able to stand on its own 2 feet?
Share this..
Related stories
UK economic growth revised upwards
Despite the fact that many economists believe that the UK is on the verge of a double dip recession the UK authorities yesterday surprisingly upgraded UK economic growth in the second quarter to 1.2%. The main factor behind the revision was household spending, which increased by 0.7% over the period. So what does this mean for the UK economy? Unfortunately, these figures are historic and ultima...
Read MoreGordon Brown takes over the EU summit
It seems very much that Gordon Brown is on the move, he is on a roll and he wants the whole world to know about it!
After taking his place at the ongoing EU summit in Brussels which is discussing how to combat the European banking crisis, Gordon Brown has literally taken over. He has challenged EU leaders to move to stage two of his UK blueprint and look at how regulations across t...
London financial markets under attack from the EU
A French official this evening "let the cat out of the bag" with regards to EU plans for financial regulation throughout Europe. London has for some time been one of the major financial centres of the world although apparently the EU regulators are looking to complete a "pincer movement" which should see power transferred from London to Brussels. So what exactly is going on?
The Fre...
Trinity Mirror signals end of advertising slump
As the UK recession began to worsen in 2008/2009 it became apparent that companies were significantly reducing their online and off-line advertising budgets. This led to significant problems for media-based companies such as Trinity Mirror, the publisher of the Daily Mirror newspaper, and indeed there were concerns that some of the U.K.'s major media groups would struggle to survive. However this...
Read MoreCutting the fat from the last UK boom time
If there is one employment sector in the UK which appears to have benefited more than most it has to be public services. We have seen over 500,000 jobs created over the last decade with a substantial increase in pension liabilities one of the more worrying aspects of the growth. However, a number of experts are now wondering why it has taken the recession for the government to announce a significa...
Read More