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Excruciating interest rate rise risks wider economic damage, ICAEW says


Published: 03 Aug 2023

Responding to today’s interest rate decision by the Bank of England’s Monetary Policy Committee (Thursday 3 August 2023), Suren Thiru, Economics Director at ICAEW, said:

“This latest rate hike will be particularly excruciating for those people struggling with mounting mortgage bills and firms dealing with a multitude of cost pressures.

“The Bank of England remains too fixated on backward looking data when setting interest rates, which risks wider economic damage given the large time lag between rate rises and their full impact on households and businesses.

“Given that most of the 14 interest rate rises are yet to filter through into the real economy, the Bank risks over-tightening, needlessly adding to the risk of recession.

“With the Bank of England expecting inflation to fall quickly, the case for further interest rate hikes is diminishing fast.”


Notes to editors:

Contact: ICAEW media office media.office@icaew.com, tom.mackintosh@icaew.com or 07866 853 841


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