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CITY AM | SHADOW MPC

ALLISTER HEATH | CITY A.M.
“The economy is recovering and requires tighter policy. However, given the political uncertainty, rates should be kept on hold – with the option of an emergency MPC meeting in a few weeks if required.”

SIMON WARD | NEW STAR
“Raise rates by 25 basis points. The election result risks delaying necessary fiscal retrenchment. Inflation news continues to disappoint and market inflation expectations have risen significantly since February.”

MICHAEL SAUNDERS | CITIGROUP
“The MPC will surely do nothing as it waits to see what kind of government we get. But it may need to hike in the coming months if sterling slides and the UK’s commitment to economic stability comes into question.”

GEORGE BUCKLEY | DEUTSCHE BANK
“The combination of mixed economic news, continued uncertainty about the pace of fiscal tightening, and the risks presented by euro area financial concerns suggests the Bank should keep rates on hold for the time being.”

VICKY REDWOOD | CAPITAL ECONOMICS
“It makes sense to wait to see what news on the future path of fiscal policy emerges now the election is over. The MPC should hold this month, but be prepared to raise QE again later this year to offset the fiscal squeeze.”

JAMIE DANNHAUSER | LOMBARD STREET RESEARCH
“Growth could surprise on the upside in the near-term. The MPC should not move yet; but a limited withdrawal of stimulus, most likely through a rise in interest rates, is appropriate before the end of the year.”

GRAEME LEACH | INSTITUTE OF DIRECTORS
“There’s a degree of monetary policy certainty despite the political and fiscal uncertainty. We do not expect any change in monetary policy by the MPC. Interest rates and quantitative easing should remain on hold.”

HOWARD ARCHER | IHS GLOBAL INSIGHT
“Hold on interest rates and QE. Now is not the time to change monetary policy with heightened political uncertainty and the fallout from the Greek crisis both threats to still fragile longer-term growth prospects.”

TREVOR WILLIAMS | LLOYDS TSB
“Keep rates and QE on hold. Irrespective of the next UK government, the ructions in the financial markets last week due to the Greece crisis mean its first task is to tackle the fiscal deficit.”