The Bank of England should be wary of rushing into interest rate rises to curb inflation, according to its chief economist, in a warning that the UK economy is vulnerable to a sharper slowdown next year than forecasts would suggest. “That configuration now leaves me comfortable with the current stance of monetary policy, with no bias on the direction of the next move in interest rates,” he said. If inflationary pressures were lower then the effectiveness of low interest rates in boosting the economy could suffer, he added. He said monetary policy, as set by the Bank, had little influence on productivity. “Without the support of looser monetary policy, all regions would then have experienced a contraction in real GDP per head since 2008,” he said.

Source: The Guardian December 02, 2016 14:37 UTC