views

CITY A.M. | SHADOW MPC

ALLISTER HEATH | CITY A.M.
“The money supply is growing at an accelerated rate and the economy is expanding at a decent, but still sluggish, pace. With inflation too high, it is time for a symbolic hike in rates, whatever happens at the Budget.”

SIMON WARD | HENDERSON
“Raise by 0.25 per cent. Negative real rates have depressed money demand, resulting in excess liquidity that has pushed up nominal growth and inflation. The MPC must start normalising rates if it is serious about the target.”

GEORGE BUCKLEY | DEUTSCHE BANK
“Despite inflation above target it is too early to think about raising rates, particularly with the markets and economy in a fragile state. We expect the first tightening by the end of the year but moves will be gradual.”

MICHAEL SAUNDERS | CITIGROUP
“No change ahead of the extra fiscal tightening. Provided inflation expectations are not destabilised, the MPC are likely to keep rates on hold for the rest of this year to cushion the economy against fiscal tightening.”

VICKY REDWOOD | CAPITAL ECONOMICS
“The MPC should hold fire. Some are arguing that the rise in inflation requires an interest rate rise. But the slack in the economy should pull inflation down sharply before long.”

TREVOR WILLIAMS | LLOYDS TSB
“No change, especially with the full austerity measures yet to be announced. Although inflation is high, it will fall back in the medium-term, especially given the downside risks to growth emanating from the Eurozone.”

HOWARD ARCHER | IHS GLOBAL INSIGHT
Hold on interest rates and QE. If the forthcoming Budget is very tough, monetary policy needs to remain loose to support the still fragile recovery. And the Eurozone's problems pose a threat to UK growth.

JAMIE DANNHAUSER | LOMBARD STREET RESEARCH
“Markets expect the Bank not to move this year. Even allowing for the downside risks due to problems in the Eurozone, above-target inflation and robust near-term growth should force the MPC’s hand before 2011”

GRAEME LEACH | IOD
“The MPC is likely to remain on hold with no change in interest rates or QE. The more interesting call will be in July after the emergency Budget and another month's money supply data. I lean towards more QE then.”