BoE’s Sentance repeats call for UK rate rise

* Policymaker says BoE forecasts wrong on inflation

* Most hawkish member of rate-setting committee

LONDON, Nov 28 (BestGrowthStock) – The Bank of England should
embark on a gradual rise in interest rates to avoid the need of
a damaging sharp increase later on, policymaker Andrew Sentance
said in a newspaper article on Sunday.

Sentance, the most hawkish member of the nine-strong
Monetary Policy Committee (MPC), said the BoE’s inflation
forecasts had consistently underestimated the upside impact
from rising global energy and commodity prices.

Writing in The Sunday Telegraph, Sentance said the BoE’s
forecasts had also persistently overstated the downward
pressure on inflation from spare capacity in the British
economy.

Annual consumer price inflation rose unexpectedly to a
four-month high of 3.2 percent in October, forcing BoE Governor
Mervyn King to write another letter to the government
explaining why inflation remains so far above its 2 percent
target.

“It is now time for monetary policy in the UK to get back
to business and for interest rates to rise gradually towards
normal levels,” Sentance said.

Otherwise, he added, “Interest rates may need to rise much
more sharply in the future, creating a severe jolt to
confidence and the recovery.”

Since June, Sentance has argued for a quarter-point
interest rise from a record low of 0.5 percent interest rates
but he has yet to win over any of his colleagues on the MPC.
(Reporting by Tim Castle, editing by Matthew Lewis)

BoE’s Sentance repeats call for UK rate rise