英国银行面临信誉危机

This is the man who wanted your mortgage to go up last summer. Andrew Sentance says it’s bad for the economy that the base rate of interest is so low because it makes inflation worse. Since June of last year, he’s tried but failed to convince his fellow decision-makers at the Bank of England to increase the interest rate. And having run out of time to do so, he’s told Sky News of his fears that the public will lose faith in the bank.

"The person on the street, people going out doing their shopping, are experiencing inflation. And if inflation does not come down in the way that the bank is suggesting, and I think that this is a big risk if that’s the case. Eh…Then that’s going to have a serious knock-on effect on the credibility of the bank’s commitment to its inflation target."

The Bank of England’s interest rate has been at the record low 0.5% since March of 2009. Meanwhile inflation has reached 4.5 %, more than double the rate of price rises, which is considered normal for a healthy economy. And while the Bank is supposed to increase borrowing costs to bring the rate of inflation down, it’s not done so because the economy is barely growing.

Before leaving the Bank of England, Andrew Sentance did win two other members of its monetary policy committee over to his camp calling for an increase in the interest rate. But a clear majority still think the time is wrong for a rate rise. Now that it's all changed in the committee, the attention turns to what the new member Ben Broadbent will do. But so far, he’s giving nothing away.

"You could be forgiven for pursuing Dr. Sentence’s line of argument, worrying that this... his higher spot reading so-called might persist into the future. On the other hand, you know there are huge risks in both directions still."

Sentance says that the Bank of England is sticking with policy for a different time, but his views are now on the outside. Others also on the outside who know how the bank works don’t expect an increase in borrowing costs until next year.