Interest rate rise risks "longer and deeper" recession
The UK’s leading progressive thinktank, IPPR, has responded to the Bank of England’s interest rate rise.
Carsten Jung, senior economist at IPPR and former Bank of England economist, said:
“Interest rates had already increased significantly, and due to the time it takes for rises to be effective, most of the impact of these is yet to come. With the economy projected to slow significantly, there is a risk of overtightening, causing a “hard landing” for the economy in form of a longer and deeper recession. We have previously argued that interest rates between 3 and 4 per cent would likely be sufficient to bring inflation back down; with rates now at 3.5 per cent the Bank should slow down rises to give time for the economics of this to play out."