No need to rush a rate rise

IF EVER there was a moment when the Bank of England has a green light to raise interest rates, it is at the February session of the Monetary Policy Committee which starts today.

The Confederation of British Industry says it would not protest at a quarter-point rise to 4% - and no less a figure than Ed Balls, the Chancellor's top economic adviser, makes it clear that he would welcome a pre-emptive rise.

There is evidence that the economy is fizzing away. The CBI's retail survey shows that high-street sales were buoyant in January. Manufacturing is recovering and the government's spending spree goes on. Given the limited amount of spare capacity, there must be real concern about overheating.

But do interest rates need to rise just yet? Inflation is running well below the new target of 2%, although we will not see the Bank of England's projections for prices in two years' time for another week.

The pound is also in robust form, hitting its highest level for a year against the currencies of Britain's major trading partners at 103.6 on its weighted index. It remains close to its best in a decade against the dollar at almost $1.84.

There is also the likelihood that the dollar will sink again when euroland finance ministers are given the heave-ho by the American Treasury at the weekend session of rich country finance ministers in Florida. A firm exchange rate for the pound acts like higher interest rates, moderating growth and providing a windbreak against imported inflation.

So it is quite possible that the Bank will confound the City, the CBI and the Treasury and decide to hold rates. There is certainly a case. But if it does, it will only be a short respite for all of us with mortgages.

Low flying

POPULAR sentiment is with Ryanair following its tangle with the European Commission. In the politics of the EU, upstart carriers like Ryanair are unlikely to receive the benefit of the doubt when many nations - with the notable exception of Britain - are busy propping up flag carriers.

What is far more important for Ryanair and other no-frills airlines over the longer term is the erosion of competitiveness as the established carriers compete more effectively.

Amid the concerns about Ryanair's future profitability there is one group of investors that is sitting pretty. Two sons of Tony Ryan, founder and non-executive director, showed enviable timing in selling 6.4m shares on 14 January, two weeks before a profit warning.

The company makes it clear that neither son is on the Ryanair board and they had no knowledge of the warning that knocked a third off the company's value. But investors who recall the fate of Tony Ryan's previous enterprise, the ill-fated airline leasing group GPA, might feel caution is required.

Voting reform

NEVER in the history of the City have shareholder votes counted more at company meetings. The furore over fat-cat pay means every vote - including those of individual investors - counts.

Indeed, the biggest victory for governance last year, the vote against GlaxoSmithKline's remuneration, was carried by only a whisker. In the battle of the spinners that often follows AGMs, figures issued by companies and their advisers are often misleading, leaving out abstentions.

Against this background the proposals in Paul Myners' review into shareholder voting are to be commended. They are a route to cleaning up the Spanish customs that make vote counts unreliable and the abuse that has crept into the practice of stock lending.

The most infamous example of this was the revolt worked up by Laxey Partners against British Land. The rebels claimed to speak for 10% of the stock, but owned virtually none of the equity - the shares had been borrowed from the real owners. Myners rightly advocates that if there are ' contentious' resolutions on the table, the shares should be automatically returned to their real investors.

Myners wants the technology moved into the 21st century through electronic voting, allowing more accurate and quicker results. He also wants to see abstentions properly recorded as 'proxies consciously withheld'. This would prevent the current practice of deliberate obfuscation.

All that we ask is that the institutions and company secretaries immediately implement the proposals in time for this year's AGM season. It has taken nearly five years for the original ideas in a 1998/99 inquiry to be turned into reality. Further delay is unacceptable.