The Bank of England should start raising interest rates “gradually” now to combat inflation and prevent borrowing costs from rising too quickly in the future, Conservative lawmaker Michael Fallon said.
“They will have to work out whether, given they’re going to go up anyway, whether it’d be better now to start raising gradually, or whether they’re prepared to face a very sudden increase much later in the year,” Fallon said on BBC Radio 5 Live’s “Pienaar’s Politics” show yesterday. “I tend to be a ’now man’ because we’ve had constant reassurances that inflation will fall and it hasn’t fallen,” he said.
“Given that rates are artificially low, they’re going to have to go up anyway eventually, I’d rather see them start moving up gradually than go up in a huge jump, perhaps in the autumn,” he said. He added that any decision on monetary policy was a matter for the Bank of England, not politicians.
Fallon serves on the U.K. Treasury Committee, which scrutinizes the expenditure, administration and policy of the Treasury and other public bodies such as the Bank of England and the Financial Services Authority.