Bank of England Talking Tough On Inflation

Sir John Gieve, the deputy governor of the Bank of England, has warned that the monetary policy committee could lose the fight against inflation.

Sir John Gieve said that if a more gradual approach to raising interest rates was take, inflation could get out of control.

In London he made a speech today, saying that there were many uncertainties ahead that complicated the decisions of policymakers when setting rates.

He mentioned the labour market, the ability of firms to raise prices, oil prices, money supply growth and volatility in financial markets, largely caused by the weakness in the US housing market.

“It can often be sensible to move rates gradually as we gauge effect of past rises,” he said. But he added: “If we get behind the curve, gradualism in monetary policy could compound problems.”

Interest rates are currently at 5.75%

Do you think the Bank of England should raise rates, lower them or just keep interest rates the same?

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