LONDON (MNI) – The Bank of England’s Monetary Policy Committee
would face a “hard and painful” job to restore price stability if the
inflation genie gets out of its bottle, MPC member Andrew Sentance said
in a City AM interview.
Sentance, who was joined by MPC member Martin Weale in voting for a
rate hike at the January meeting, restated his call for a steady
increase in Bank Rate and downplayed the shock 0.5% quarterly fall
recorded in the first estimate of Q4 GDP.
“The Office for National Statistics (ONS) don’t
have very complete information [for December] so anything that they’re
saying about that at the moment is very provisional,” Sentance said.
He highlighted the impact of the exceptionally severe winter
weather on output.
“It’s pretty clear from most people’s experience that economic life
was disrupted with the snow — we saw airports closed and people unable
to get to work,” Sentance said.
He said that business surveys were still pointing to a steady
economic recovery.
Despite the GDP figures, Sentance remained firm in his advocacy of
gradual monetary tightening.
“The longer we delay [monetary tightening] the more there is a risk
that interest rate rises when they come will have to be larger, and then
there will be a bigger risk of a shock to confidence,” Sentance said.
–London newsroom: 00 44 20 7862 7491; email: drobinson@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MT$$$$]
