George steps up opposition to cut
Thursday 15 August 1996
Minutes of the meeting, published yesterday, the first since June's quarter-point rate reduction, revealed that the Governor advised "strongly against any further interest rate cut on the basis of the present evidence".
He told Mr Clarke that since the base rate cut, to 5.75 per cent, there had been nothing in the economic figures to alter the Bank's view that rates should have remained at their previous level of 6 per cent.
In reality, Mr George explained, the reduction might have made matters worse, by putting the Government's inflation target at risk.
He said: "Last month's cut in interest rates would, in itself, have increased the risk to the inflation target. To that extent it may have brought forward the time when interest rates will need to rise."
In response, Mr Clarke, with masterly understatement, admitted that he and the Governor were "still slightly apart on the decision to cut rates". But he claimed there had been no difference of opinion in last month's meeting about the need to maintain rates at their current level.
Economists interpreted the minutes as further evidence of a tougher approach by the Bank. Ciaran Barr from Deutsche Morgan Grenfell, said: "Eddie is clearly saying that Ken Clarke will be taking a real chance if he tries to cut rates again. He will lose all credibility with the markets."
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Germany sees 'visible rise' in support for far-right extremism in response to perceived 'Islamisation' of the West
iJobs Money & Business
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...
£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...