The Institute of Economic Affairs’ shadow MPC recently voted for an interest rate rise for the first time since September 2011, with two members pressing to double the Bank rate to 1%. This is a result of a lull in the eurozone and calmer markets which have given the Bank of England a window to raise rates. Inflation is persistently is also above target and endangering credibility of UK policy making. The longer-term concern — shared by some MPC members — is that artificially low rates are keeping alive companies that should by rights go under, starving more worthy firms of resources and destroying growth.
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