Mervyn King warns against raising interest rates
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Bank of England governor Mervyn King has warned of the “severe” consequences of raising interest rates.
Speaking at the European Parliament in Brussels yesterday, King said rate rises would be dangerous given the high debt levels across Europe.
King said: “The economic consequences of high-level indebtedness now would become more severe if rates were to rise.”
The Monetary Policy Committee meets this Thursday to decide whether to keep the bank rate at its historic low of 0.5 per cent.
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Readers' comments (4)
Steve | 3 May 2011 10:07 am
Mervyn King has his finger on the pulse this time around and I am thankful that he is fully assessing the potential impact of any rate rise in such an economically fragile environment.
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bhavik shah | 3 May 2011 10:21 am
To control the debt, BoE will have to raise rates. A small rise will signal the need for debt reassessment. Inflation needs to be bought down.
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Shaks | 3 May 2011 1:39 pm
Good on you Kingy. Keep rates down or even drop them to .25%. I got a mortgage and I'm quite happy to continue investing in property. And what's all the fuss over inflation? Just go and earn more. If your weekly grocery bill costs you £3.46 more now than it did last year spend less on booze and fags or just write more business. Simples!!!!!!!!!
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Richard Wise | 5 May 2011 10:42 am
This is an admission that the BOE has abandoned it's remit on inflation.
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