CITY A.M. | SHADOW MPC

ALLISTER HEATH | CITY A.M
“All the surveys are showing strong business activity – across the sectors – and seriously rising costs. A quarter point rate rise is urgently required to send a strong message.”

SIMON WARD | HENDERSON
“Half-point hike. The debate is shifting from whether to how far rates need to rise. Solid January business surveys and a surge in inflation expectations strengthen the case. Sterling is at risk if we continue to dither.”

GEORGE BUCKLEY | DEUTSCHE BANK
“Price pressures and the recovery might eventually justify higher rates. But weather related uncertainties, low levels of activity, and the external factors behind inflation all suggest policy on hold.”

MICHAEL SAUNDERS | CITIGROUP
“An early hike would reduce the risk that inflation expectations become destabilised and hence reduce risks of an even sharper hike subsequently. Inflation is far above target and far above the MPC's forecasts.”

VICKY REDWOOD | CAPITAL ECONOMICS
“Given the uncertainty of the underlying pace of economic growth, we should stay in wait and see mode. Keep rates and QE on hold. A small rate rise would do little to boost credibility, but could harm the recovery.”

TREVOR WILLIAMS | LLOYDS TSB
“Hold our nerves and keep rates on hold. With the monetary situation bleak, inflation will fall back. The upcoming fiscal squeeze puts recovery at risk, and the UK is not benefiting so much from the global upturn.”

HOWARD ARCHER | IHS GLOBAL INSIGHT
“No change. It is premature to raise interest rates given that the economy looks fragile and fiscal tightening is now kicking in. And pay growth remains muted so inflation should still eventually fall back markedly.”

JAMIE DANNHAUSER | LOMBARD STREET RESEARCH
“CPI inflation will be well above the two per cent target throughout the year. There are risks on an upward creep in inflation expectations. However, the time for higher rates has not yet arrived.”

GRAEME LEACH | IOD
“Hold rates. The combination of the fourth quarter GDP numbers, anaemic money supply growth and no evidence of a wage price spiral suggests near zero interest rates should continue for some time yet.”