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Why the Bank of England should not raise the Bank Rate

Summary:
I wrote this post on the 21st April, 2018, for PRIME. “There are a significant number of households that are in so deep that the slightest sign of rough weather could see them in over their heads,” said Jonathan Davidson, one of the FCA’s directors of supervision. Given these imbalances, the biggest danger facing the British economy is this: at their meeting in May the Monetary Policy Committee of the Bank of England is very likely to raise rates – despite a warning from the governor – because of the ongoing fear of inflation.  (Andrew Sentence, an ex-MPC member tweeted this week that it is “Quite likely that all 4 external #MPC members will vote for a May rate rise. Can they get 1 or 2 internal votes to support them? If Carney is opposed, Broadbent and Haldane are main candidates to push

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I wrote this post on the 21st April, 2018, for PRIME.

“There are a significant number of households that are in so deep that the slightest sign of rough weather could see them in over their heads,” said Jonathan Davidson, one of the FCA’s directors of supervision.

Given these imbalances, the biggest danger facing the British economy is this: at their meeting in May the Monetary Policy Committee of the Bank of England is very likely to raise rates – despite a warning from the governor – because of the ongoing fear of inflation.  (Andrew Sentence, an ex-MPC member tweeted this week that it is “Quite likely that all 4 external #MPC members will vote for a May rate rise. Can they get 1 or 2 internal votes to support them? If Carney is opposed, Broadbent and Haldane are main candidates to push through a rate rise – so watch their statements in the next week or so.”)

If Andrew Sentence is right, MPC members will raise the Bank Rate despite the dangers listed above – and after signs of instability and volatility in the global economy.

You can link to it here. 

Ann Pettifor
I’m Ann Pettifor, author and analyst of the global financial system, and co-author of The Green New Deal (2008). I predicted an Anglo-American debt-deflationary crisis back in 2003, and in September, 2006 published The Coming First World Debt Crisis (Palgrave). I am known for my work on the sovereign debts of low income countries and for leading an international movement for the cancellation of debts, Jubilee 2000.

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