City A.M. shadow MPC votes 7-2 to hold rates

ALLISTER HEATH | CITY A.M.

Recent business surveys suggest that growth is not only still strong, but may even be accelerating. The wage squeeze is ending, unemployment’s on the way down and the emergency that brought in ultra-loose monetary policy is long over. Bank rate should be increased by 0.5 percentage points.

JAMES SPROULE
INSTITUTE OF DIRECTORS

We are moving ever closer to the point where quantitative easing should be unwound and interest rates revert to a more normal range.

SIMON WARD HENDERSON

Raise Bank rate to one per cent. Trends signal strong growth and inflationary pressure later in 2014. Spare capacity has been exhausted.

GEORGE BUCKLEY DEUTSCHE BANK

While low inflation can buy the Bank some time, if growth is sustainable at current rates, the MPC may have to raise rates sooner than a year from now.

VICKY PRYCE
GOVERNMENT ADVISER

Lending overall is subdued and any house price bubble concern can be dealt with differently – inflation is low and there is no sign of wage pressure yet.

ROBERT WOOD BERENBERG BANK

The economy is no longer fragile and needs gradual rate hikes soon. But I would wait until after summer, when the world outlook should be clearer.

TREVOR WILLIAMS LLOYDS BANK

The recovery continues, but with low price inflation and modest wage inflation. There is still spare capacity. As such, we would leave rates on hold.

JONATHAN LOYNES
CAPITAL ECONOMICS

Rates should hold well into 2015. Despite the strength of the housing market, the benign outlook for inflation suggests that there is no rush to act.

ROSS WALKER
RBS

The case for a rate rise is building – but the relatively benign near-term inflation outlook affords a little more time.