29.08.08 by Andrew Montlake

Call For Interest Rate Cut

In an interesting and rather provocative move, arch Dove member of the Monetary Policy Committee Professor David Blanchflower has broken ranks and called for a rate cut, right now and in a big way.

David “Danny” Blanchflower, as he is known in City circles (ho ho) said in an interview with the Reuters news agency, "The fears that I have expressed over the last six months have started to come to fruition...I've obviously voted on quite a number of occasions now for small cuts but we need to act and we probably need to act in larger amounts than that. We need to actually get ahead of the game and it appears that we are now behind."

"Sitting by doing nothing is not going to get us out of this."

I must say I wholeheartedly agree. We are sitting here tottering on the edge of a recession, although for many people it feels like we are already in one. Not only are the Bank of England adopting a wait and see approach which has been going on for a while now but we have an indecisive Government who seem pretty clueless about how to act and would rather leak their ideas to “gauge” public reaction than act like leaders and lead.

This is a pretty hard hitting statement from Professor Blanchflower and considering almost all the other members of the MPC seem to disagree with him at present, seems to be a stinging criticism of their actions.

The next meeting is likely to be a feisty affair and it will be interesting to see if his words make a dent and we see a surprise early cut.

Here’s hoping they do.