ECONOMISTS’ VIEWS: IS IT TIME TO START NORMALISING INTEREST RATES?
PATRICK MINFORD | CARDIFF BUSINESS SCHOOL
“Yes, because more easing will be counterproductive. They have to accept that there’s an environment of slow growth now. The danger is the Bank could push sterling down even more, by staying loose while the rest of the world tightens, resulting in longer-term inflationary effects.”
SIMON WARD | HENDERSON GLOBAL INVESTORS
“On the basis of recent inflation news, it is certainly time to begin normalisation. I think trend productivity growth is 1.5 per cent rather than two per cent, so earnings growth of 3.5 per cent or more is inconsistent with the inflation target. And last week we saw private sector wage growth of three per cent.”
PHILIP SHAW | INVESTEC
“We firmly believe that the committee is correct in keeping interest rates low. An inflation target is in place not for its own sake, but to help foster economic stability, especially in the context of the high inflationary periods during the 1970s and 1980s. A November hike is the most likely outcome.”