Shadow MPC votes for another rate increase - 1st October 2006

SMPC votes by six votes to three to raise interest rates

The IEA’s Shadow Monetary Policy Committee, a group of leading monetary economists that monitors developments in UK monetary policy, voted to raise interest rates by six votes to three in October.

One of those voting to hold rates believed that a rise was needed but wished to wait until the November inflation report and forecasts were published.

A number of members expressed concern about the rapid growth of broad money which, so far, has mainly affected asset prices. Kent Matthews of Cardiff Business School, on the other hand, felt that the economy should get used to the August rise in rates.

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