30Oct
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".
