Wealth Manager - the site for professional investment managers

Register to get unlimited access to 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
CIO Tapes 2: two warnings and a lot of optimism

CIO Tapes 2: two warnings and a lot of optimism

Our group of leading asset management CIOs see a lot of opportunities – and overseas investors are buying UK too

Play Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Read More
Your Business: Cover Star Club

Profile: Thomas Miller explains its post-restructure plans

Profile: Thomas Miller explains its post-restructure plans

Thomas Miller Investment’s (TMI) head of wealth Matt Phillips has strong opinions about many things

Wealth Manager on Twitter