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Is Mervyn King too hawkish? A former member of the Bank of England’s Monetary Policy Committee (MPC) has said that the MPC is just that and likely to raise interest rates too far. His concerns about managing inflation would mean that he would be more hawkish than required.

Stephen Nickell left the MPC last year and is now head of the National Housing and Planning Advice Unit. He has concerns that the MPC will be tougher than it needs to be on the costs of borrowing. Mr Nickell said that the Bank’s Governor, Mr King, would prefer to go down in history as a Governor who presided over a small recession rather than one who lost control of inflation.

There still remains a strong threat that the MPC will raise the base rate to 6% in early September despite good inflation figures for July and recent stock market upheaval.

Mr Nickell, thought to be a dove during his MPC days, is generally against higher interest rates, saying his instincts were to do a “bit less than what they’re doing”. He didn’t think he would as alarmist about money supply as some members of the committee appear to be. He included Tim Besley and Andrew Sentence with Mervyn King as having a kind of generalised unease. He doesn’t share that, and thought that current MPC member Rachel Lomax would feel the same as he does.

Mr Nickell also thought that with 300,000 more people unemployed that two years ago, there must be a degree of slack in the labour market. He thought that house prices would not rise much over the next two years as the impact of higher interest rates started to bite. Mr Nickell was slightly concerned that import prices from China were no longer falling as rapidly as they had been to keep inflation low.