Bank member votes for interest rate rise again

Category: Economy
Date: 7/21/2010

A member of the Bank of England's Monetary Policy Committee (MPC) voted to increase the base rate of interest for the second consecutive month.

Minutes from the MPC's monthly meeting showed that Andrew Sentance voted to increase the measure by 0.25% to 0.75%.

Mr. Sentance found himself overruled by the other seven members of the Committee, however, as they all voted to maintain the base rate at its current level of 0.5%, where it has remained since March 2009.

It is the second month in succession that Mr. Sentance has voted for interest rates to be increased slightly.

"We believe such a move would be misguided given the tough fiscal measures announced in the Budget," said David Kern, chief economist at the British Chambers of Commerce

"Raising interest rates too soon would further increase the risks of a double-dip recession.

"We support the majority decision to maintain the current approach, and we believe the need for increasing the size of the quantitative easing programme may have to be considered if the economy weakens."

The combination of low interest rates and high inflation continue to hamper savers, who are increasingly seeing their pots being eroded.

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