BoE rate hikes on 'gut feeling'?

Concerns have been raised that the Bank of England's (BoE) decisions on interest rate rises have been taken on "gut feelings" rather than hard facts.

The criticism comes from the British Chamber of Commerce's economic adviser David Kern who believes the BoE's Monetary Policy Committee have changed their criteria to support their plans to reduce inflation.

"I'm calling for a greater transparency in the analytical arguments," he told the Daily Telegraph.

"Our political framework is based on a demand/supply balance in the economy and the money supply features when one needs additional argument for some policy.

"What I'm asking is, where would it stop? Is it all gut feelings that things are a little bit too hot?"

His comments came as the BCC released data showing strong domestic demand for manufactured goods.

Mr Kern said: "I think there is a question to what extent the respondents have underestimated some of the problems facing the sector but taking the results as they are, they look good."

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