Spare capacity in the UK's fast recovering economy, according to Reuters, has at least one central bank official calling for hiking interest rates now, as concerns about how much spare capacity margin remains grow.
One of two central bank rate-setters who voted for rate hikes last August, Ian McCafferty, again, called for raising interest rates now even though British inflation remains at a five-year low of 1.2 percent below the central bank target of 2 percent.
There's something to be said for McCafferty's claim amidst all the deflation talk. If there's anything more in the media than deflation and more out than inflation we have not seen or heard it. It's been
over five years since the Bank of England cut rates to 0.5 percent in 2009.
Britain's unemployment rate is now down from 7.7 percent a year ago August to this past August. So McCafferty's concerns about wage hikes not being far behind is part is an argument others are also making.
McCafferty also called sinking commodity prices a one-off event partly affected by the strong sterling pound. There nine other members on the rate-setting committee. So far they are opposed to any rate hikes.
The market has priced in the first rate hike sometime around mid-next year.
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