Shock as interest rates hiked to 5 per cent
Spectator (UK)MAY 2023
The BoE recognizes the harsh realities of the UK’s current economic situation, but it will continue to make the tough decisions to bring down inflation despite short-term hardships. No one wants a recession, but a brief dip in GDP is well worth a return to 2% inflation and less volatility. Recovery from the pandemic has been difficult for all countries, but the UK will weather the storm just like it has in the past.
The BoE has been inflicting unnecessary pain on the UK for nearly two years, particularly on average British households. Despite its continued rate hikes that have the UK on the verge of a mortgage crisis, core inflation continues to rise with no end in sight. The BoE has provided little clarity, and its mixed messaging has made a bad situation even worse. From the top down, the BoE has failed.