1 Sep

Blanchflower urges rate cuts

Blanchflower urges rate cuts

A member of the Bank of England's monetary policy committee (MPC) has stepped up his calls for an interest rate cut, arguing that major action is needed to bolster the economy.

David Blanchflower, who has consistently been the sole voice in favour of further base rate reductions in recent months, told Reuters he believes radical rate-cutting action is now required.

He stated: "I've obviously voted on quite a number of occasions now for small cuts but we need to act and we probably need to act in larger amounts than that."

Mr Blanchflower argued that the consequences for the economy would be serious if this did not happen, although his views have not been shared by his colleagues at recent MPC meetings.

However, others have said that despite the recent increases in inflation the next move will be down, something that could lower the cost of mortgages.

This view has been expressed by Graeme Leach, chief economist at the Institute of Directors, who said this will be the case even though he expects the MPC to be "cautious" and hold the rate in September.

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