“This significant hike to interest rates, although below the historic average, will exacerbate the squeeze on households by making loan repayments less affordable for many people whose incomes are already decimated by the cost of living crisis.
“Today’s eye-watering rise, when the UK is already sliding into recession, risks deepening the looming downturn and does little to address the global energy price shock and supply constraints driving this inflationary surge.
“Rapidly rising rates are likely to weaken the UK’s ability to lift productivity by leaving companies with little financial headroom to invest, and undermine the confidence firms need to innovate and push ahead with new projects.
“While markets will be reassured that monetary and fiscal policies are moving in the same direction, the aggressive pace of tightening means a more damaging downturn as higher borrowing costs, rising taxes, spending cuts and high inflation drag on UK output.”
Notes to editors:
Contact: ICAEW media office, email@example.com, firstname.lastname@example.org or 07866 853 841