Monday, January 24, 2011
Speech by Andrew Sentance at the European Policy Forum
"In my view, the MPC needs to steer a middle course when it comes to global pressures on inflation. We should be prepared to look through genuine one-off shocks. But 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. As I have argued in recent months, if we do not start to raise UK interest rates gradually soon, we risk having to do so more aggressively in the future â€“ which could create a big shock to business and consumer confidence further down the track."