Speaking at Mansion House last month, Bank of England Governor Mervyn King expressed willingness to raise interest rates (external website) once conditions permit it. King said:
The Monetary Policy Committee will not hesitate to begin to withdraw the current degree of stimulus when we judge that is necessary. When it comes, that is most likely to be through a rise in bank rate with asset sales being conducted later in an orderly programme over a period of time, leaving bank rate as the active instrument.
The CBI expects interest rates to begin to rise toward the end of 2010 (external website). According to CBI Chief Economic Advisor Ian McCafferty:
The recent spike in inflation seems to be easing slightly, and there are still some well-founded fears about the underlying health of the economy, and in particular flows of credit. The corollary of the tighter fiscal policy announced in the Emergency Budget has to be the continuation of a very supportive monetary policy, and while conditions may require a small upward nudge in rates towards the end of the year, it would be premature to start now.
| Tweet |
|
| Permalink | Email this |
