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Ex-BoE hawk Sentance sticks to hard line on rates

Wednesday, February 08, 2012 - 04:07

Feb. 8 - Former Bank of England MPC member Andrew Sentance sees rising interest rates back on the agenda.

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The world economy may have passed the most acute phase of -- a five year crisis but is still on life support from the central banks especially in Europe. Well here to discuss high 2012 -- and out. I'm joined by -- Britain the next Arafat and consulting. And under sentence farm policy make up at the Bank of England -- -- thanks for joining us -- I can start with you I am I -- last quote we Fordham -- extremely pessimistic on the island for Europe and the UK does that include starting to lift. Lift. -- -- I think Atlanta but it is we spent the last two years really since the recession warning clients warning this full room. That crisis in the news coming in sovereign debt market and yours is a fast movement and I don't won't won't be perfect because we're in it. And actually the first remote wipe -- much more optimistic because we don't think. The ECB and policy makers and in your room just sits on my hands and allow. Catastrophe to catastrophe torn home. They'll act and attack the mail recipients past scene right. Actions -- your loved -- -- in a sense -- maybe that dissolves the catastrophe scenario looks like maybe. It's being taken off the tight and that makes us more optimistic less pessimistic. I'm Judy you should have you mean some of the takes what's -- in the last month or so especially the I think we've had a more encouraging starts tonight though that we had in terms of the end 2011. And it's not just one fact is the number of factors. I think the US economy is looking at the stroke. The Euro crisis is looking a little bit less keys so in the states from the UK economy is a bit stronger. And also I would expect at the course of the year for the world economy get momentum from Asia Pacific region where they've -- to loosen policy but stimulus. So should the Bank of England beach thinking about withdrawing stimulus. But it at a crucial about withdrawing stimulus that -- Wouldn't support -- further injection of stimulus through another round of -- duties. I think that was the right policy in 2009. When the world economy and you -- close and very difficult position. But I think now we need to look to the source of growth internationally. And for the natural. -- recovery forces in the economy to take. And that's what we should be looking forward to in 2012. -- -- you mentioned the European Central Bank fairness long term loans to banks but how the fans in the -- talking about extending. I'm -- policy to 2014. I -- list. We still seem to be traces just how -- through this crisis on the. I would put it. 40% in May be 50% of the way through and the world weariness that wealth of deleveraging and few government -- -- household today which we've built up too much debt now I don't want climb down that tends. We're about a third to a half the white balance that's that's a long way from the press -- to cut. Maybe some future growth throughout that period that best. And it's always a risk that something thoughtless. -- units famously hot talk on and PC calling for rate rises. You use a clear about call and don't think that the central banks should be doing all the time until the economy is on I'm not sure -- I think. Central banks face challenge looking into the next he -- about how they can't it's monetary policy back to more normal settings we don't wanna get back to the rates of interest or so before the crisis. But we do need to take opportunities as they arise have to raise that a little bit but tools that give you the facility to loosen policy we need to. I think it does that that the bank of England and other central banks aren't quite a constrained position if they've got interest rates always at the lowest possible level. And I think over a period of time has passed late this year and next in the case for higher interest rates will come back on the agenda. My thanks -- to edit button from some consulting and under sentence farm policy make up the Bank of England I'm Jamie -- but this is what's --

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Ex-BoE hawk Sentance sticks to hard line on rates

Wednesday, February 08, 2012 - 04:07