David Blanchflower, an external member of the MPC who are charged by the government to fix interest rates in the UK, has warned that if the Bank Of England does not respond to the growing economic crisis instead of worrying about inflation, the UK will face unemployment of 2 million by Christmas.
Blanchflower stands by his claim that property prices will also fall by 30% and points out that a report from Nationwide this week shows that property has already dropped in value by 10%.
The MPC member has consistently called for a quarter percent cut in the interest rate but has been out voted on each occasion. He now warns that it will need a substantial cut to avoid his predictions of the economy coming true.
It will be interesting to see the response from other members of the MPC who up until now have been fixed on trying to curb inflation., although financial experts do not expect a cut in the base rate until at least November.
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