Pent Up Posted January 24, 2011 Share Posted January 24, 2011 (edited) http://www.bloomberg.com/news/2011-01-24/sentance-says-rate-rise-needed-to-tackle-accelerating-inflation.html Sentance Says Rate Rise Needed to Tackle Accelerating InflationBy Jennifer Ryan - Jan 24, 2011 6:00 PM GMT Bank of England policy maker Andrew Sentance said officials need to increase interest rates to keep price pressures from the global recovery and a weaker pound from getting entrenched in the economy. “When it is clear that global inflationary pressures, coupled with a substantial decline in the exchange rate and reasonably healthy growth of domestic demand are all contributing to a sustained period of above-target inflation, then the time has come to act,” Sentance said in a speech in London today. While food and fuel prices pushed U.K. inflation to 3.7 percent in December, the 10th month above the government’s 3 percent upper limit, the Monetary Policy Committee held the key rate at 0.5 percent this month to support growth. The central bank targets a 2 percent inflation rate and Sentance said officials’ refusal to curtail emergency stimulus may undermine their credibility and stoke further price gains. “The lack of a substantive policy response” to consumer- price gains “enhances the risk of a loss of credibility in the inflation target itself and a loss of belief in the commitment of the MPC to achieving it,” he said. The panel has split three ways since October, when Adam Posen said the bank should expand its bond-purchase plan to prevent inflation from slowing too much once a government spending squeeze takes hold. Posen last week described recent price gains as temporary, indicating he may keep pushing for more stimulus. The Office for National Statistics may say tomorrow that U.K. economic growth slowed to 0.5 percent in the fourth quarter from 0.7 percent in the previous three months, according to a Bloomberg News survey of economists. We all know Sentance's stance anyway but it's nice to hear a member of the MPC openly admit that they are losing control. Minutes of the last meeting out Wednesday. Edited January 24, 2011 by Pent Up Quote Link to comment Share on other sites More sharing options...
ken_ichikawa Posted January 24, 2011 Share Posted January 24, 2011 We all know Sentance's stance anyway but it's nice to hear a member of the MPC openly admit that they are losing control. Minutes of the last meeting out Wednesday. Bah he's a red herring put there so people think wow they are going to raise rates... It's not going to happen inflation will be allowed to tear us a new one 30-40 is possible (current inflation is about 15%. They'll keep making noises to shake people out but rates won't rise before 2350. Quote Link to comment Share on other sites More sharing options...
okaycuckoo Posted January 24, 2011 Share Posted January 24, 2011 I agree with pent up - significant that an MPC member is being explicit about this. He's an external member though. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted January 24, 2011 Share Posted January 24, 2011 "Inflationary pressures are finely balanced with slowing growth coupled with increasing unemployment and a small decrease in house prices. The recent data points to a series of one off events including oil price spikes, natural disasters causing distortions in basic commodity prices and other items. There continues to be a high level of uncertainty in the Eurozone and growth in the United States, while picking up, continues to face strong headwinds. We do not consider it wise to change our policy but to remain vigilant while we continue to monitor inflationary pressure to determine if recent spikes are a trend or a series of one-off occurences." No chnage to current policy IMO Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted January 24, 2011 Share Posted January 24, 2011 http://www.bloomberg.com/news/2011-01-24/sentance-says-rate-rise-needed-to-tackle-accelerating-inflation.html We all know Sentance's stance anyway but it's nice to hear a member of the MPC openly admit that they are losing control. Minutes of the last meeting out Wednesday. Enjoy it while you can. Jan 23rd Interestingly, the member who has been most forthright about possible dangers on the inflation front, Andrew Sentance, is shortly to step down from the committee http://www.guardian.co.uk/business/2011/jan/23/inflation-alarmists-need-historical-perspective Quote Link to comment Share on other sites More sharing options...
MrFlibble Posted January 24, 2011 Share Posted January 24, 2011 Got to keep those savers on the hook somehow... I'll believe it when I see it and I'm not just talking about a token gesture rise of 0.25% every 3 years either. Quote Link to comment Share on other sites More sharing options...
Pent Up Posted January 24, 2011 Author Share Posted January 24, 2011 Enjoy it while you can. Damn I didn't know that. When does he go? Quote Link to comment Share on other sites More sharing options...
Misanthrope Posted January 24, 2011 Share Posted January 24, 2011 Damn I didn't know that. When does he go? From his speech today: ....And with my term on the Committee coming to an end in the middle of this year..... Quote Link to comment Share on other sites More sharing options...
Pent Up Posted January 24, 2011 Author Share Posted January 24, 2011 From his speech today: Thanks. Has his replacement been announced? Surely it would have to be someone suitabley hawkish as to keep an even balance in opinions. Quote Link to comment Share on other sites More sharing options...
numper Posted January 24, 2011 Share Posted January 24, 2011 It's not going to happen inflation will be allowed to tear us a new one 30-40 is possible (current inflation is about 15%. They'll keep making noises to shake people out but rates won't rise before 2350.] YES, I Quite agree, and concur with this 2350 is an extremely significant year in the judeo/christian calendar going forward .......... We might indeed have to wait until this very year until we see such a "rise" in rates [ Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted January 24, 2011 Share Posted January 24, 2011 Damn I didn't know that. When does he go? I didn't know Sentance was going until I read that article today. Funnily enough it was a another member of the MPC who sent me the link in an email I've discussing inflation with him and that article was one of his arguments. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted January 24, 2011 Share Posted January 24, 2011 Bah he's a red herring put there so people think wow they are going to raise rates... It's not going to happen inflation will be allowed to tear us a new one 30-40 is possible (current inflation is about 15%. They'll keep making noises to shake people out but rates won't rise before 2350. +1 Quote Link to comment Share on other sites More sharing options...
mfp123 Posted January 24, 2011 Share Posted January 24, 2011 what is the point in an inflation target if all you do when you hit it is pat yourself on the back and sing your own praises, but when you fail to reach it you just go oh well, and ignore it. Quote Link to comment Share on other sites More sharing options...
fellow Posted January 24, 2011 Share Posted January 24, 2011 “The lack of a substantive policy response” to consumer- price gains “enhances the risk of a loss of credibility in the inflation target itself and a loss of belief in the commitment of the MPC to achieving it,” I don't care about their credibility. What I do care about is my savings being worth less every week Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 24, 2011 Share Posted January 24, 2011 Enjoy it while you can. Excellent so another apologist stooge to be parachuted in then? Quote Link to comment Share on other sites More sharing options...
libspero Posted January 24, 2011 Share Posted January 24, 2011 Bah he's a red herring put there so people think wow they are going to raise rates... It's not going to happen inflation will be allowed to tear us a new one 30-40 is possible (current inflation is about 15%. They'll keep making noises to shake people out but rates won't rise before 2350. Yep.. that's how I read it. He's the "bad boy" they wheel out when they are being criticised over ignoring their inflation target to make it look like they are taking it seriously. In actually fact I expect Mervyn just asks him to get out there and "manage inflation expectations". Quote Link to comment Share on other sites More sharing options...
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