CITY A.M. | SHADOW MPC

ALLISTER HEATH | CITY A.M
“The recovery is still on track, despite the effects of December’s winter freeze. With inflation set to hit four per cent in the coming months, rates must be normalied before it is too late.”

SIMON WARD | HENDERSON
“Raise by 0.5 per cent. A rate hike last summer would have boosted sterling, capping inflation expectations and discouraging pass-through of input cost and tax increases – thus tempering inflation.”

GEORGE BUCKLEY | DEUTSCHE BANK
“Mixed economic news means it is too early to raise rates, but the ongoing recovery and higher than expected inflation means that further policy easing would be inappropriate.”

MICHAEL SAUNDERS | CITIGROUP
“Inflation will soon have to be taken seriously, tackled first through ‘open mouth’ operations and then, around the summer, by raising rates and withdrawing part of the emergency stimulus.”

VICKY REDWOOD | CAPITAL ECONOMICS
“The continued rise in inflation is almost all due to temporary factors, so there’s no need for a panic rate hike. I’d keep rates and QE unchanged, but keep a close eye on pay growth.”

TREVOR WILLIAMS | LLOYDS TSB
“Rate should be held. Rising inflation is due to relative prices (VAT,, commodities) that will drop out; the real story is that the UK economy is weakening and further loosening might be required.”

HOWARD ARCHER | IHS GLOBAL INSIGHT
“Inflation and rising expectations are a concern, so a rate hike may be needed soon to protect BoE credibility. But I would not act yet given growth headwinds and the recent VAT rise.”

JAMIE DANNHAUSER | LOMBARD STREET RESEARCH
“Manufacturing is booming, but snow disruption has made it unclear how the rest of the economy is faring. Some withdrawal of stimulus will be needed this year but that time is not yet here.”

GRAEME LEACH | IOD
“Maintain the status quo for another month in order to assess the impact of the VAT rise. But the latest money supply figures suggest that there is a growing case for more QE.”