IEA response to the Bank of England’s interest rate decision
Responding, Julian Jessop, economics fellow, Institute of Economic Affairs, said: “The MPC’s decision to leave interest rates on hold today was understandable but it also opens up the Bank to criticism that it is simply kicking the can further down the road.
“Inflation has been above target for most of the last five years and is not expected to fall back to 2% for at least another year.
“There are strong arguments against raising UK interest rates as far as the markets are currently expecting, including the weakness of the labour market and of broad money growth.
“But a small increase now might have helped to safeguard credibility and reduce the need for larger increases later.”