In a speech he gave on Thursday in London, Andrew Sentance, a member of the Monetary Policy Committee of the Bank of England (BOE), called for a raise in interest rates now to forestall having to act in a more dramatic manner later. His comments come as the divide widens among policy setters on how to handle inflation and growth.
In a Bloomberg report, Sentance, who advocated a half-percent interest rate hike this month, cited a number of reasons for his views. U.K. inflation continues to linger above the 2% target set by the bank. Companies are passing along increasing costs to customers as demand in Britain rises and there is global pressure on pricing.
In his speech, titled “Ten Good Reasons to Tighten,” Sentance said of interest rates, “We should increase them gradually and slowly if we can. But the risk of delaying interest rate rises too long is that this gradual approach may cease to be an option in the future.”