1 Oct

Former minister calls for rate cuts

Former minister calls for rate cuts

Former cabinet minister John Redwood has called for an urgent cut in interest rates, arguing that the problems Britain faces are not chiefly those of inflation.

Speaking at a fringe meeting during the Conservative Party conference, Mr Redwood argued that higher rates are discouraging financial institutions from lending, the BBC reports.

He added: "Please, please, government understand that we are not fighting inflation. That will be nailed next year, there will be no inflation."

A cut in the base rate now from its current five per cent level could help lower the cost of mortgages.

Yesterday US financial services firm Citigroup predicted that a number of central banks, including the Bank of England, are likely to cut their interest rates soon, the Independent reports.

The next meeting of the Bank of England's monetary policy committee (MPC) will take place on October 8th and 9th.

April was the last month when the MPC lowered the base rate.

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