SMPC Votes to Raise Rates 5th January 2007

IEA Shadow Monetary Policy Committee votes by five to four to raise rates now

In its latest monthly vote, the IEA's Shadow Monetatary Policy Committee voted to raise interest rates.

Four SMPC members voted to raise Bank rate by 0.25% on 11 January, one wanted a 0.5% increase, there were three holds, and one person voted for a cut. One of the holds had a bias to raise rates in February, when a new set of Inflation Report forecasts would be available to the MPC, if a rise had not already occurred by then.

Those members favouring a rise in interest rates were concerned both about high levels of monetary growth and about rising expectations of inflations - as well as increases in the actual level of inflation.

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