Kristin Forbes, one of the nine people that set UK interest rates, has warned that interest rates will need to be increased well before inflation hits the Bank of England’s 2% target.
The Monetary Policy Committee (MPC) wrote in the Telegraph that waiting too long would risk undermining the recovery, especially if interest rates then need to be increased faster than the gradual path which the MPC expects.
As well as sitting on the MPC, Forbes is professor of management and global economics at the MIT Sloan School of Management.
However, Forbes has not yet voted for a rate rise. In August Forbes was one of eight members that voted to keep Bank Rate at 0.5%; one member, Ian McCafferty, voted to increase Bank Rate by 25 basis points.