Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

MPC's Weale: Rate rises needed sooner rather than later

MPC's Weale: Rate rises needed sooner rather than later

Monetary Policy Committee (MPC) member Martin Weale has warned that even a 'gradual' interest rate rise could see borrowing costs rise by up to 1% per year, representing a faster rate than markets are expecting.

Weale told the Financial Times that Britain needs to start raising interest rates sooner rather than later if it wants to avoid sharp increases in the future. He also warned that if the MPC wanted the pace to be gradual, it should not wait too long before it starts.With reference to 'gradual', he said a rate rise would involve the bank tightening by 'no more than' 25 basis points a quarter.

'If you want to have baby steps you do have to start sooner,' he told the Financial Times. 'The question is: how close are we getting to "soon"? Of course we can never be sure, but the economy has sustained fairly rapid growth in demand.'

'So I’m having to ask the question – and the answer is less definite than it was six months ago – "where do I think the interest rate should be at the moment?'"

In Weale's view a rate rise isn't necessary right now, but he points out that spare capacity in the economy has shrunk since March, when it was estimated at around 0.9% of GDP.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Foster: the world’s most unconventional monetary policies

Brewin's Foster: the world’s most unconventional monetary policies

In this week's podcast, Guy Foster asks why the world’s biggest economies are pursuing some of the world’s most unconventional monetary policies. 

Play Charles Tan on Woodford & hidden trust income gems

Charles Tan on Woodford & hidden trust income gems

Cantor Fitzgerald investment company analyst Charles Tan discusses Woodford Patient Capital and some of the income trusts slipping under the radar.  

Play Taxicab Tenner: SGPB Hambros CIO Eric Verleyen

Taxicab Tenner: SGPB Hambros CIO Eric Verleyen

In the second episode of our new series, Verleyen jumps on board a black cab and explains how hard it's become to find good valuation on the market.  

Wealth Manager on Twitter