MPC member calls for rates to be cut

by Richard Kilner

Story link: MPC member calls for rates to be cut

A member of the Monetary Policy Committee (MPC) has warned that without a cut in interest rates, house prices could slump by 30% and 2 million could be unemployed by Christmas.

Professor David Blanchflower, part of the Bank of England’s MPC, made his stark assessment in an interview with news agency Reuters.

Professor Blanchflower has called for urgent action to reduce interest rates, and believes that without them some 330,000 people could lose their jobs between now and Christmas.

He has called for lower rates before, and has not agreed with the counterpoint, propounded by MPC hawks, that rate cuts would fuel inflation, which is already far above its target.

Blanchflower has indicated he may even call for a cut of 50 basis points, rather than the usual alteration of 25.

Four consecutive months have passed during which the Bank of England has retained the 5% interest rate, whilst inflation has soared to 4.4%, more than double its 2% target.