Barry Naisbitt

The Monetary Policy Committee has come in for much criticism of late. Do you think that had they raised rates in 2021, we would not be seeing the 9% inflation rate we are now? There was a strong case for starting the process of raising interest rates in the summer of last year, about 6 months before the MPC started its very tentative rate rises.

Lockdown ended on 19 July; the furlough will end on 30 September. The economy is set to reach its pre-pandemic activity level, but the Bank of England’s extreme monetary accommodation appears to go on forever. It is past time for the Bank to act to bolster its credibility and to act to avoid un-anchoring inflation expectations. The Bank of England’s Monetary Policy Committee has put itself in an unenviable position.

Ball, L.M., and Mazumder, S. (2019), ‘A Phillips Curve for the Euro Area’, NBER Working Paper No. w26450, November. Caldara, D., Prestipino, A., Iacoviello, M., Molligo, P. and Raffo, A. (2019), ‘The economic effects of trade policy uncertainty’, International Finance Discussion Papers Number 1256, Board of Governors of the Federal Reserve System. Carreras, O. and Kirby, S. (2016), ‘Is the global trade slowdown a risk to our forecast outlook?’, National Institute Economic Review, February, 235, pp.