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Painful interest rate rise to drag on UK’s economic prospects

Author: ICAEW

Published: 02 Feb 2023

Suren Thiru, Economics Director at ICAEW, responds to today’s interest rate decision by the Bank of England’s Monetary Policy Committee (Thursday 2 February 2023).

“Another substantial hike in interest rates will come as a painful blow to people and companies already struggling under a myriad of other soaring cost pressures, with borrowers particularly affected.

“The aggressive rate rises over the past year will increasingly drag on our economic prospects in 2023 as they filter into the broader economy, stifling activity and weakening confidence.

“With inflation projected to ease sharply, today’s 50bps rise should be the last of this magnitude. If we do slide into recession, then policymakers may be forced to reverse policy sooner than many expect.”


Notes to editors:

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