The government’s new economic council has said the Bank of England would be right to raise interest rates by 75bps.
Karen Ward, chief strategist at JP Morgan Asset Management and one of the four members of the Treasury’s new Economic Advisory Council, said a smaller rise could spark a new round of market selling.
The rise would take the Bank of England base rate to 3%, its highest level since 2008.
However, Charles Goodhart, a founding member of the Monetary Policy Committee, said the bank may “chicken out and do only 50 points, citing uncertainty about future fiscal plans”.
