MPC praised for not hiking interest rates

by Richard Kilner

Story link: MPC praised for not hiking interest rates

Jeremy Cook, of World First, has commented upon the recent debate regarding the near-future direction of the UK interest rate.

Cook has called on the Bank of England’s Monetary Policy Committee (MPC) to resist the siren calls to raise rates.

Cook has argued that inflationary pressures will ease without rate rises as the year progresses, and praised Governor Mervyn King and the MPC for not panicking and keeping rates at 0.5%.

He went on to assert that rate rises could lead to crushing the still tentative economic recovery.

Although the Bank of England has retained the 0.5% interest rate unchanged for over a year, dispute over whether it would be more prudent to keep or increase the rate has emerged.

The OECD thinktank has advocated rate rises later in 2010, arguing that this is a necessary step to combat inflation, which is persistently above the 2% target rate.