MPC ‘dove’ Miles calls for rate rise before May 2015
Miles, who has sat on the committee since 2009, has been one of the most dovish members when it comes to interest rates, never once voting for a rise since joining the MPC. He has previously warned an early rate rise would constrain growth.
However, in his latest comments to the Telegraph, he said the economic recovery in the UK was ‘resilient’ and ‘sustainable’, meaning it is now time for rates to start rising.
“Having Bank Rate at 0.5pc is obviously not a normal or sustainable setting for monetary policy,” he said. “We have had such low rates because the economy took a huge hit in the aftermath of the financial crisis of 2008. Until fairly recently we have not had any sort of sustained recovery from that. Now we have one.”
He said the sustainable recovery – and subdued inflation – means it is time for Britain to consider raising interest rates after over five years at 0.5%.
He said he was increasingly likely to vote for a rise before he leaves the committee in May 2015.
However, he said it was unlikely the Bank would implement sharp hikes in the rate and rates would go up gradually instead.
He added it was “wildly unlikely” rates would rise back to the 5% level seen before the crisis.