The increase in interest rates to 2.25% has, as expected, sparked a lot of debate in both the corporate and political spheres.
The Liberal Democrats have weighed in despite Downing Street’s refusal to speak on the topic, claiming it is “a matter for the independent Bank of England.”
‘Homeowners are being punished’
The party’s Treasury spokeswoman Sarah Olney said the interest rate rise would be a “hammer blow to struggling homeowners who are being punished by the government’s failure to control inflation”.
“This monster rate rise could have been avoided if Conservative ministers bothered to take action sooner on energy bills and the rising cost of living,” she added.
‘This will dampen consumer confidence’
There was sympathy from the British Chambers of Commerce, which said the Bank faced “an increasingly tricky balancing act”.
“The interest rate is a very blunt instrument to control inflationary pressures that are largely driven by rocketing energy costs and global supply chain disruption,” said its head of research David Bharier
“The Bank’s decision to raise rates will increase the risk for individuals and organizations exposed to debt burdens and rising mortgage costs – dampening consumer confidence.”
‘Fiscal statement must get firms investing’
Never mind today’s news – companies are already looking ahead to tomorrow’s mini-budget, says the Confederation of British Industry.
“Against the backdrop of stubbornly high inflation, another hefty rise in interest rates was largely expected,” said lead economist Alpesh Paleja.
“With signs of an economic downturn coming down the track, firms will be looking to the fiscal statement to help perk up confidence and get more firms investing and growing.”
Source: Sky news