Buiter urges BoE to raise rates - papers 2 June

Willem Buiter, a founding member of the Monetary Policy Committee and a professor at the London School of Economics, said the Bank needed to raise the cost of borrowing in order to keep inflation under control - despite the pain higher rates would inflict on the economy. Prof Buiter says: "The Bank hopes that, with the economy slowing down quite sharply, further rate increases will not be necessary to get inflation back on target over a two-year horizon. I am not so sure.” A CONFRONTATION IS building up between Mervyn King, the Governor of the Bank of England, and the Treasury over the...