One of the nine members of the MPC feels the longer rates are held low, the likelihood of a sharp increase in the future.

Interest Rates in Gradual Rise

One of the nine members of the Monetary Policy Committee, Andrew Sentance, has stated that the longer interest rates are kept at the current all time low level, the more likely a sharp rise in the future.

He set out three arguments for the rates to rise but felt the UK economy would be able to withstand the effects.

With annual consumer price inflation at a four-month high of 3.2% in October, the government is expecting a letter from Bank Governor Mervyn King explaining why inflation is sticking above the 2% target.

Andrew Sentance says it’s time for rates to start rising toward normal levels – he has argued for a quarter-point interest rise since June, but is still battling all eight colleagues at the MPC.

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