“Yet again, the Bank of England is failing to recognise the perils of high inflation. By leaving rates so low for so long, the risk of a much sharper rise in interest rates later is growing, because once the markets lose confidence in the determination to fight inflation, they will no longer be willing to finance UK borrowing at current negative real interest rates.
“A small rise in rates is also urgently needed to reassure consumers and markets that UK inflation is going to be controlled. So far, there is no sign of the Bank taking the inflation threat seriously, even though it is so real to so many in this country.
“Savers and pensioners living on fixed incomes are suffering real-term losses as a result of high inflation and need some signal that the authorities really do understand the dangers of leaving inflation unchecked. The sooner rates start to rise the better.”
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