A former Bank of England policymaker has said interest rates are unlikely to rise before Christmas.
Andrew Sentens, who was on the bank’s monetary policy committee from 2006 to 2011, rejected the ‘scrooge’ rate hike in December.
The price of the City increased from 0.1 per cent to 0.25 per cent in December and then to 0.5 per cent in March the following year.
Uday: The price of the city had gone up from 0.1 per cent in December to 0.25 per cent in December and then to 0.5 per cent in March the following year.
But Sentence said it is more likely that interest rates will start rising in February.
He told The Mail on Sunday that, while at the bank, he researched the history of interest rate hikes in December and found they were ‘rare’.
“In my first Christmas on the committee, I reviewed when interest rates went up before Christmas,” he said. ‘Is it going to be Santa or Scrooge? It would be quite unusual for them to start raising rates just before Christmas.
‘Actually, we will have to wait until early February to do anything concrete.’
Sentence was known as a ‘baz’ in support of rate hikes in the bank and said it was important that rates started rising soon. However, he said that 1994, when Ken Clarke was chancellor, was the last time rates jumped in December.
There has been no rate hike in December under the Monetary Policy Committee created by Gordon Brown in 1997. The cuts were made during the financial crisis in December 2007 and 2008.
If the bank raises rates before Christmas, it will add costs to homes that are already facing rising prices in the economy, from fuel to Christmas toys, as supply chain crises and shortages bite. In.
Sentense, who is now senior advisor at consultancy firm Cambridge Econometrics, said: ‘I am cautious about what the MPC can do because no one on that committee has voted to raise interest rates yet.’
He said it may be very difficult for the MPC to incorporate Rishi Sunak’s October 27 budget into the inflation forecast at its next meeting on November 4. ‘So it would be quite a change, if at the next meeting or two, they did actually shoot [and increase rates],’ he said.