Key MPC member calls for interest rate rise

BoEMonetary Policy Committee member Michael Saunders has called for a “modest rise” in interest rates to control inflation.

Saunders, a key member of the MPC for the past year, said in a speech in Cardiff that an increase in rates would “help ensure a sustainable return of inflation to target over time”, the BBC reports.

While Saunders said the Brexit path “might be bumpy” he added that the Bank of England “should not maintain an overly loose stance as insurance against this scenario” but “should be prepared to respond as needed if it happens”.

The Consumer Prices Index was 2.6 per cent in July, above the 2 per cent Government target.