1
Sep
Blanchflower urges rate cuts
A member of the Bank of England's monetary policy committee (MPC)
has stepped up his calls for an interest rate cut, arguing that
major action is needed to bolster the economy.
David Blanchflower, who has consistently been the sole voice in
favour of further base rate reductions in recent months, told
Reuters he believes radical rate-cutting action is now
required.
He stated: "I've obviously voted on quite a number of occasions now
for small cuts but we need to act and we probably need to act in
larger amounts than that."
Mr Blanchflower argued that the consequences for the economy would
be serious if this did not happen, although his views have not been
shared by his colleagues at recent MPC meetings.
However, others have said that despite the recent increases in
inflation the next move will be down, something that could lower
the cost of mortgages.
This view has been expressed by Graeme Leach, chief economist at
the Institute of Directors, who said this will be the case even
though he expects the MPC to be "cautious" and hold the rate in
September.
