Ann Pettifor

Why the Bank of England Should Not Raise the Bank Rate

I wrote this post on the 21st April, 2018, for PRIME.

“There are a significant number of households that are in so deep that the slightest sign of rough weather could see them in over their heads,” said Jonathan Davidson, one of the FCA’s directors of supervision.

Given these imbalances, the biggest danger facing the British economy is this: at their meeting in May the Monetary Policy Committee of the Bank of England is very likely to raise rates – despite a warning from the governor – because of the ongoing fear of inflation.  (Andrew Sentence, an ex-MPC member tweeted this week that it is “Quite likely that all 4 external #MPC members will vote for a May rate rise. Can they get 1 or 2 internal votes to support them? If Carney is opposed, Broadbent and Haldane are main candidates to push through a rate rise – so watch their statements in the next week or so.”)

If Andrew Sentence is right, MPC members will raise the Bank Rate despite the dangers listed above – and after signs of instability and volatility in the global economy.

You can link to it here. 


Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.