Artemis' Foster: MPC should follow ECB on rates

Artemis' James Foster said the Monetary Policy Committee should hike interest rates to the same level as those in the eurozone to push up the value of sterling and stem inflation.

The manager of the £529m Strategic Bond fund said if the Bank of England raised rates from a historic low of 0.5% to match the eurozone's 1.25%, sterling could rise by 10%. "At the moment, the UK is way out of kilter with European rates. For a European investor, it actively discourages them from owning sterling," he said. "If UK rates were pushed up, sterling would rise, which would counter some of the commodity price increases, and remove a lot of the inflationary pressure." He said in the last few years, sterling has fallen by around 30%, while inflation is still twice the Bank o...