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Interest rates must go back up to 5%, says MPC member

23 December 2010
Written by rosalind renshaw

New warnings have been sounded about the likelihood of interest rates rising.

After the Confederation of British Industry said earlier this week that rates would have start to rise in the New Year, a member of the MPC has said that interest rates will go back to being “normalised” at around 5%.

Paul Fisher said: “What we need to do is to trigger the mindset in people that that’s where rates will eventually go back to.”

Minutes of this month’s MCP meeting suggest that rate rises are already being considered to stave off inflation.

While Fisher gave no timescale to his predictions, he said the Bank of England would proceed cautiously.

He added: “We have to bear in mind that savers have been doing particularly badly while borrowers have been benefiting. We can’t favour one group over another.”

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