BoE says rates may need sharp rise
Thursday 30 January 1997
Mr George's forthright advice, in minutes of the monetary meeting on 11 December published yesterday, revealed the split between him and Kenneth Clarke to be wider than anyone had expected.
According to the minutes: "The Bank was fairly confident on the basis of the present evidence that interest rates would need to rise, certainly by 0.5 per cent, in the next few months." If rates were not raised a quarter point in December, they continue, "the Bank would need to advise a half per cent move in either January or February".
City experts said yesterday they expected the Bank of England would advise Mr Clarke to increase the cost of borrowing after next Wednesday's meeting, even though recent figures have given the Chancellor more ammunition to resist.
"The Governor cannot be as vocal, but I cannot see him going back on his recommendation," said David Walton, an economist at investment bank Goldman Sachs. He pointed out that even though many commentators thought Mr Clarke had been right in May 1995, the last time he ignored such strong advice from the Bank to tighten policy, inflation had not reached its target 18 months later.
A survey published yesterday gave Mr George extra backing. Business Strategies Ltd, a consultancy, predicted that consumer spending would grow 4.5 per cent this year, the highest since the recession. The pace at which consumer confidence was increasing had slowed down since the previous quarter, but David Fell of BSL said: "Most people across the country have a pretty robust view of economic prospects."
The survey showed that concerns about unemployment had receded, especially in the South-east, Midlands and Yorkshire and Humberside, but consumers were more worried about inflation.
- 2 Italian police 'reveal' what Jesus looked like as a young boy
- 3 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 4 University student in court for allegedly covering housemates' food in window cleaner and spit
- 5 Ryan Gosling posts tribute to 'Ryan Gosling Won't Eat His Cereal' creator Ryan McHenry
Italian police 'reveal' what Jesus looked like as a young boy
Who should I vote for? The Independent quiz matches best political party for undecided voters ahead of the general election
Mysterious 'X-Files' sounds heard miles above the Earth
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...