Insurrection at the Bank of England

First the Fed, now the B of E:

Spencer Dale, the Bank of England’s Chief Economist, is joining hawkish bankers Andrew Sentance and Martin Weale. The three have voted for an interest-rate increase.

The debate is (of couse) over inflation, and like the Fed, the B of E is now threatened with splitting into two camps: A Weak Economy/Deflation bankers vs the Fear of Inflation Bankers.

“For three members, the case for removing some monetary stimulus at this meeting was compelling,” according to minutes of the Feb. 10 decision published today in London. “Of those members not favoring a rise in bank rate, some thought that the case for an increase had nevertheless grown in strength.”

Among members pushing for the first interest-rate increase since July 2007, Dale and Weale voted for a 25 basis-point move from the record low of 0.5 percent, while Sentance increased his call to 50 basis points. Adam Posen maintained his vote to add 50 billion pounds ($81.2 billion) to the bank’s 200 billion- pound bond-purchase plan. The other five members voted for no policy changes. The pound rose after the minutes were published.”

Must be nice to have an appreciating currency when you travel — where I am, I get two Bajan dollars for each American greenback — but the Brits get 3 Bajans for every pound.

Hence, the island is mostly Brits and Canadians. Us Yanks are few and far between…


Dale Joins Sentance, Weale in Push for BOE Rate Increase
Svenja O’Donnell and Jennifer Ryan
Bloomberg, Feb. 23 2011

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