Economist in attack on BofE’s rate ‘dithering’

A TOP economist is poised to launch a campaign calling for an overhaul of the Bank of England’s rate-setting committee after ‘dithering’ over its decisions.

Andrew Sentance, who sat on the Monetary Policy Committee until 2011, intends to push for an investigation into its role in raising rates and guarding against the soaring cost of goods.

Sentance said he will write to the chairman of the Treasury Select Committee and former Cabinet Minister Mel Stride this month.

‘A lot has gone wrong over the last ten to 15 years in the sense that the MPC has been very dormant,’ he said. ‘It hasn’t done very much. It’s been very reluctant to act.

‘The personalities that have been appointed don’t seem to have been very strong and willing to challenge. So I would list a series of things that need to be investigated.’

His comments come after the Bank of England raised interest rates from 0.1 per cent to 0.25 per cent in December.

But the increase only came after the International Monetary Fund warned about surging inflation and urged the central bank to lift rates. The IMF said inflation would rise to about 5.5 per cent early this year and warned that the rising cost of goods will not quickly ebb away.

Bank of England governor Andrew Bailey felt the heat in November after voting against an increase in rates despite hints that a rise was on the cards – wrongfooting the market.

Other senior economists have criticised the Bank of England over its indecision.