BOE Sentance Sees Danger Of ‘Upward Creep’ In Inflation Rates

LONDON (MNI) – Bank of England Monetary Policy Committee Member
Andrew Sentance has repeated his call for a gradual increases in Bank
Rate to cap what he sees as the danger of an upward drift in inflation
expectations.

“The danger with all this (above-target inflation) is that it
becomes something that people start to expect in the future and start to
influence wage increases and price-setting at companies … there is
also some evidence that that is beginning to happen,” Sentance said in
an interview with the BBC’s World Service.

Sentance also said that the UK economy is facing price pressures
from a variety of sources, with the weakness of sterling further
aggravating the situation.

“The world economy is actually growing very strongly … this is a
very different economic scenario from the one where we put in place very
low interest rates in 2009,” he said.

–London newsroom: 00 44 20 7862 7492;e-mail: ukeditorial@marketnews.com

[TOPICS: M$B$$$,M$$BE$,MSSFX$]