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
Play Rathbones' Smith on China's economic hegemony ambitions

Rathbones' Smith on China's economic hegemony ambitions

Discussing China's saving problem, Ed Smith argues that if the country opens up there will be an outflow of capital.

Play Liontrust ESG head says sustainable investment doesn't mean low return

Liontrust ESG head says sustainable investment doesn't mean low return

Peter Michaelis talks about ethical investment growth and where he sees future opportunites.

Play Are platforms the biggest barrier to wealth manager ETF take-up?

Are platforms the biggest barrier to wealth manager ETF take-up?

Citywire hosted a roundtable discussion to find out how and if wealth managers are using ETFs in their clients' portfolios and the challenges they face trading through different platforms.

Read More
Wealth Manager on Twitter