YESTERDAY'S INFLATION REPORT from the Bank of England can only mean one thing, and that is interest rates are set to continue rising, The Times writes.
The statements from governor Mervyn King indicate the next rate rise could come as soon as May, the paper says, because of the predicted boom times that lie ahead in the next couple of years.
King also hinted that the market’s forecast year-end base rate of 4.75% may be a more conservative estimate than the Banks’ own figures would suggest, the paper adds.
The Guardian says the Bank’s statements on inflation are already causing more pain for exporters, as currency traders jumped into sterling overnight when the Federal Reserve indicated rates in the US will remain at record lows.
Fed chairman Alan Greenspan spoke about the need to keep rates low to counter “risks”, despite clear evidence the US economy is growing strongly, with job creation finally coming on stream.
The Daily Telegraph siezes on other words from King, but this time relating to criticism of Ed Balls, chief economic adviser to the Treasury, for speaking out of turn on the need to raise interest rates.
Balls put forward the view that rates should be increased sooner rather than later in a speech last Tuesday, the Telegraph reports.
King yesterday said essentially that people “in sensitive positions” should shut up in the week leading up to any Monetary Policy Committee meeting so as not to appear as if they are trying to influence the outcome of the vote on rates by its members.
A BATTLE OF ANOTHER sorts is breaking out in Scotland today with the news that the Scottish Executive has tripled its previous estimates of GDP growth in the region since 2001.
Instead of annual GDP growth of 0.6% annually, the new figures suggest the economy grew by 1.75% every year since 2001.
Skeptics include opposition politicians, but also a large chunk of the Scottish business community, the paper indicates, particularly as some are firmly of the belief that “Scotland has underperformed the UK for most of the past decade.”IFAonline
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