THE SUNDAY TIMES: PRESSURE is growing on the Bank of England to cut interest rates this week as gloom over the economy intensifies.
Two of Britain’s best-known economists, Patrick Minford and Tim Congdon, say the Bank’s monetary policy committee (MPC) needs to slash rates to get the banking system working and head off a sharp downturn.
Minford, a professor at the Cardiff Business School and former adviser to Margaret Thatcher and the Treasury, called for an urgent 0.75 percentage point cut. He said the bank was being “irresponsible” in not acting already to “stabilise a fast-deteriorating situation” brought about by the sharp rise in money-market interest rates since summer.
Three-month Libor (London interbank offered rate), at which banks lend to each other, hit nearly 6.6% last week. “I regard the Bank’s behaviour as highly irresponsible, as I regard its behaviour in August and September as irresponsible and neglectful of a century of monetary teaching,” he said. “It is time for some sense to prevail.” Rate cut urged to end the gloom >>>
Mark Alexander
