Former Prime Minister Sir John Major has called for the Bank of England to increase interest rates to as high as 5 per cent.
The Telegraph reports Major discussing the matter with grassroots Conservative members and warning that low interest rates are punishing savers.
In June, the Bank warned that a 2 per cent rise in interest rates would threaten the UK economy as a fragile recovery takes hold.
But Major said the Government should help pensioners being punished by “cripplingly unfair” low interest rates.
He also said the Bank of England ought to return interest rates to “normal levels, say three to five per cent” to ensure society treats “the saver as fairly as it treats the debtor”.
The Bank of England’s forward guidance policy means interest rates are likely to stay at 0.5 per cent until unemployment falls below 7 per cent.
They have been at current levels since March 2009 and there are currently no cash saving accounts paying above the rate of inflation.
Major, who was Conservative Prime Minister from 1990 to 1997, recently called for a windfall tax on energy companies profits in response to Labour’s proposed price freeze from 2015 to 2017.