Last week we saw interest rates rise by 0.5% to 1.75% - the biggest rise in 27 years! It wasn’t however, entirely surprising given the level of inflation in the economy, and unprecedented levels being endured in the production economy.
📈 While consumer price inflation is sky high at 8.2% and set to continue soaring, it pales in comparison to producer price inflation which stands at an eye-watering 24%.
With so much inflationary pressure stacked in the supply side of the economy, there is a real concern that the Bank of England may well be impotent to curtail inflation’s rampage by discouraging consumer spending through base rate adjustments.
There is real concern that the Bank may be taking a peashooter to a gunfight - Make UK Senior Economist, James Brougham