Bank of England ‘still looking in rear view mirror’

Commenting on the Bank of England Monetary Policy Committee’s decision to raise Bank Rate by 25 basis points to 5.25 per cent, Julian Jessop, Economics Fellow at the free market Institute of Economic Affairs, said:

“The Bank’s decision to raise rates again, albeit by just a quarter point, suggests that the MPC is still looking in the rear view mirror.

“Money and credit growth have already slowed sharply and other leading indicators of inflation have weakened, including commodity prices and evidence from business surveys.

“It would have made more sense to pause to assess the impact of the large increases in rates that have already taken place, as other central banks have done.

“The UK economy is like a frog slowly being cooked by ever higher interest rates. By raising the temperature further now, the Bank risks doing too much and, once again, only realising its mistake when it is too late.”