Interest rate rise risks doing more harm than good, says IPPR

The UK’s leading progressive thinktank, IPPR, has responded to the announcement that the Bank of England has increased its interest rates to 5 per cent.

Dr George Dibb, head of the centre for economic justice at IPPR, said:

“This interest rate rise risks doing more harm than good. The Bank of England has been forced to take action because of government inaction. This will put enormous pressure on mortgage holders, and we are now on the precipice of intentionally pushing the economy into recession.

“Instead of further rate rises, we need a more balanced set of policies, including more fiscal policy action, to address the persistence of inflation. This should involve further price support measures to lower energy prices, excess profits taxes to disincentivize excessive price increases, and income support to help smooth out wage adjustments.”