Not often you see big bank management saying we should hike rates.
Europe’s biggest bank accused central bankers of failing to address inflation yesterday and called on them to raise interest rates to curb spending, even if it hurt consumers in the short term.
Michael Geoghegan, chief executive of HSBC, said that some economic decision-makers were ignoring the risk of rocketing inflation because they were keen to support ailing housing markets and preserve a feel-good factor.
He said that Americans had been comforted by low interest rates in the wake of the collapsing housing market and he predicted that US interest rates would not rise until after November’s presidential election. “Inflation is a long-term problem because there’s no long-term will to solve it,” he said.