30 Oct

MPC member in rates appeal

MPC member in rates appeal

A member of the Bank of England's monetary policy committee (MPC) has urged his colleagues to adopt an "aggressive" approach to cutting interest rates.

David Blanchflower told an audience in Canterbury that the MPC needed to make several large rate cuts to prevent the UK facing a "relatively deep and long-lasting recession".

If this call is heeded, one consequence could be substantial reductions in the cost of mortgages, which may help revive the UK housing market.

While Mr Blanchflower has been a persistent advocate of cuts, voting for a trimming of the base rate in every MPC meeting this year, the one supporter of higher rates in recent months has also said the economic situation now favours rate cuts.

Tim Besley, who voted for a 0.25 per cent rise in the July and August meetings, said this week that the risk of inflation rising has now "substantially diminished".

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