A BANK of
Monetary policy committee (MPC) member
McCafferty argued that the gradual pace at which the Bank expects to tighten was another point in favour of an earlier rate hike, echoing comments made by fellow policymakers
Speaking on the
Noting that the drop in productivity in financial services has made up 19 per cent of the aggregate fall across the economy, McCafferty said that this could well be down to new strictures introduced since the crash. "The first theme is changing regulation. This has required companies in several sub-sectors to maintain or increase staffing levels relative to output… More staff are required to manage new infrastructure, system and regulatory requirements," he said.
"A fuller understanding of why productivity has remained so weak, and to what extent it is therefore likely to recover, is critical for the path of interest rates as the expansion continues," McCafferty added.
Minutes from the latest meeting of the MPC released on Wednesday also showed that the low number of forecasters expecting an increase in interest rates this year was "somewhat surprising".
FORBES GETS THE NOD FROM POLITICIANS KRISTIN Forbes, who is joining the Bank of
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