27 October 2006
The deputy governor of the Bank of England has called for interest rates to go up to try to curb the demand for loans and credit.
Sir John Gieve has admitted he was one of four rate setters in the Bank of England to vote for a rise in interest rates at the Monetary Policy Committee's (MPC) last meeting earlier this month.
He explained that his decision to vote for higher rates was down to concerns over the UK's credit growth.
"I voted for a further increase earlier this month partly because I was not convinced that current rates would be sufficient to bring credit growth and nominal demand back to their long-term sustainable path," Sir John said.
"I also felt that the impact of moving too slowly on the credibility of the regime and thus the future prospects for the economy was of greater concern, given the robust rate of growth, than an unnecessary slowdown in activity," he added
Interest rates currently stand at 5.5%, their highest level for the past six years.
Analysts are predicting further interest rate increases of a quarter at next week's MPC meeting, which would bring the base rates up to 5.75%.
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