Comments: Shadow MPC votes for October rate hike

I think Professor Kent Matthews is spot on with his analysis. I am not at the moment persuaded that a further interest rate rise in November is imminent. Whilst I acknowledge that inflation is uncomfortably high and the growth of broad money is a worry, in my opinion this is due to the tail-end of an inflationary bulge that occurred with the energy price hikes of late last year.

It has also been very noticeable that oil prices have fallen sharply in recent weeks, and Gordon Pepper is wrong to dismiss the significance of this. And, as many commentators have said, wage inflation remains surprisingly subdued. Finally, the effect of the August interest rate rise has yet to be felt so, in the absence of any significant inflationary threats, it's my belief that the BoE will wish to keep interest rates on hold for the foreseeable future.

Posted by Chris Ashley at October 1, 2006 04:52 PM

Base rate is sensitive to Real GDP growing more or less than 0.625% for each quarter.
I would like to read the reports from your own shadow MPC.
Foreign central banks are holding huge quantities of US$s.US M0,M1 and M2,broad money has been growing very fast since before 2000.So,its best if all currencies free float,especially the USD.I especially like what Gordon Pepper and Tim Congdon have to say.

Posted by Derek Wildman at December 15, 2006 02:28 PM