EIU: Rates to Stay on Hold Despite Inflation Fears

EIU GLOBAL FORECAST: The Bank of England is set to remain on the sidelines, with rates and QE on hold, as a weak economy and high inflation continue

Holly Cook 27 January, 2011 | 10:33AM

In spite of City demands for a modest increase in interest rates, the Economist Intelligence Unit's Editorial Director and Chief Economist, Robin Bew, believes the Bank of England will keep rates where they are; the economy remains too weak to sustain a rate increase even if inflation trends higher.  

In his latest Global Forecast, Bew  also explains his view on the future of the eurozone, bank bashing and commodity prices. Bew believes banks must not be over-regulated as a result of Basel III--the point isn’t to worry about banking strength but to make sure these financial institutions function in such a way that the wider economy gets the volume of credit it needs.

The full transcript is available below.

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About Author

Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites

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