City split on need for rate rise this week
Monday 02 February 1998
Some City economists hold firm to their view that the cost of borrowing needs to increase again. In a paper published this morning, Michael Dicks of Lehman Brothers argues that more weight should be placed on indicators of inflationary pressure such as higher earnings growth than on signs of weakness in manufacturing, like the latest CBI surveys.
Mr Dicks says: "Certainly the call is a close one. But if rates are not raised, then it will require some awfully good news on the inflation front to prevent a hike later in the year."
The Bank's "Inflation Report" this month was likely to have to show a higher forecast for inflation than its prediction in November because of higher-than-expected figures in the meantime, he said.
On the other hand, the "shadow MPC" today advises the real thing to leave rates unchanged, although on a split vote.
This group - consisting of nine monetarist economists such as Sir Alan Walters, once adviser to Margaret Thatcher, Professor Patrick Minford, and Professor Peter Spencer of Birkbeck College - concluded that the recent figures failed to give a consistent picture of where the economy was heading. The uncertainty swung the vote in favour of inaction.
A survey of small and medium-sized businesses in manufacturing, published this morning by the Confederation of British Industry and chartered accountants Pannell Kerr Foster, confirmed the subdued outlook in manufacturing. Business confidence fell to a five-year low, with export optimism down for the fifth time running.
- 1 Frank Lampard's face drops when Holly Willoughby introduces him as a 'Man City legend'
- 2 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 3 The confessions of men who ordered mail-order brides
- 4 General Election 2015: Stephen Hawking says he will vote Labour
- 5 Yazidi sex slaves undergoing surgery to 'restore virginity' after being raped by Isis militants
General Election 2015: Tories sack candidate who said she would never support 'the Jew' Ed Miliband
The four utterly contradictory polls that tell the story of this election and why it is pointless trying to predict the outcome
9/11: Iranian General accuses US of organising September 11 terror attacks
General Election 2015: Prospect of Labour-SNP coalition makes one in four voters less likely to support Ed Miliband, says survey
General Election 2015: Stephen Hawking says he will vote Labour
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
Andrew Lloyd Webber: Phantom of the Opera writer mocked after issuing a warning about Ed Miliband and Nicola Sturgeon
General election 2015: Labour will toughen hate crimes legislation surrounding Islamophobia
EU exit would hit UK economy much harder than neighbouring countries, study finds
iJobs Money & Business
£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...
£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...