Bank chief economist eyes rate rise

Andy Haldane

The chief economist of the Bank of England has revealed he may vote to raise interest rates in the second half of the year.

The BBC reports that Bank of England chief economist Andy Haldane (pictured) has said leaving a rate hike until too late could lead to steeper rate rises in the future.

The Monetary Policy Committee this month voted to leave interest rates at their record low of 0.25 per cent for another month.

Mr Haldane has revealed he considered a rate rise in June but decided to wait.

Royal London Asset Management economist Ian Kernohan says: “Having thought there were only two hawks left on the MPC, it is now clear there are three.

“Mr Haldane clearly considers a tightening is needed well ahead of market expectations.”

The value of the pound climbed above $1.27 after Mr Haldane’s comments, having fallen earlier in the day following the Queen’s Speech.

But Governor of the Bank Mark Carney said earlier in the that “now is not yet the time to begin” raising rates.

Kernohan adds: ‘Our own view is that the impact of political uncertainty on business confidence and the continued squeeze on household real incomes make a rate rise unlikely.’