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Sentance the lone voice for rate rise

Sentance the lone voice for rate rise

Category: Economy

Updated: 22/09/2010
First Published: 22/09/2010

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Andrew Sentance is fast finding himself to be the lone voice in nine as his vote to increase interest rates fell on deaf ears.

Minutes of the monthly meeting of the Bank of England's Monetary Policy Committee show that Mr Sentance voted for the base rate of interest to rise by 0.25 percentage points.

It is the fourth month in a row that he has voted for the measure to rise from its current historic low of 0.5%, where it has remained since March 2009.

"In this member's (Mr Sentance) view, a well communicated policy of gradually increasing Bank Rate would not destabilise business and consumer confidence and would reduce the risk of a sharper jolt to confidence from larger unexpected rises at a later stage," detailed the meeting's minutes.

However, as has been the case on every occasion that he voted for a rise in rates, Mr Sentance found himself outnumbered, with all remaining eight MPC members voting to keep rates where they are for another month at least.

It remains unclear when interest rates will eventually rise, with sentiment split on whether an impending increase would be positive.

Savers would be given some respite by one of a series of small rises, especially given stubbornly high inflation.

However, rising rates could be catastrophic for thousands of homeowners who have been saved from falling into arrears or defaulting on their mortgage because of the lowly nature of the measure.

Wide spread problems n the mortgage market – where any recovery is still very much in its infancy – could increase the chances of a double dip recession.

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