Bank’s rate-setters welcome Broadbent to the committee

Julian Harris
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FORMER Goldman Sachs economist Ben Broadbent makes his debut on the Bank of England’s rate-setting committee this week, with stuttering growth and stubborn inflation heightening its dilemma.

Only sluggish expansion was recorded for May in the UK’s service and manufacturing sectors, which make up over 90 per cent of GDP.

Yet consumer price inflation spiked to a two and a half year high of 4.5 per cent in April, with the Bank forecasting CPI to hit five per cent this year and remain above target throughout next year.

With Broadbent replacing the monetary policy committee’s arch-hawk Andrew Sentance, some analysts expect the MPC to take a more dovish turn.

Sentance has voted consistently for a rise in Bank rate since last summer, but was only joined by two other committee members in the early months of this year.

Senior official Paul Fisher reiterated the MPC’s dovish message last week. “There remains time to allow the economy to recover before the eventual tightening begins,” Fisher said, arguing that downside risks to growth outweigh inflation risks.