The Bank of England needs to walk a fine line - Comment on today's base rate rise from Simon Webb at LiveMore Capital

22 September 2022

Simon Webb, managing director – capital markets and finance “Today’s hike in Bank of England base rate, while widely anticipated, still means they are the highest they’ve been for a generation. There are many people for whom this will cause real financial hardship, particularly coming on top of escalating energy and food prices. While much focus is put on the younger generation, there are many people over 50 who will be really worrying about how they are going to make ends meet. Of particular concern are people who are coming to the end of a mortgage fixed rate term, who are facing huge leaps in their mortgage payments and mortgage prisoners who are often at the mercy of a lender’s rising standard variable rates. This rise leaves a lot of people increasingly vulnerable.”

“The inflation challenge is a difficult one given that much of the inflationary pressures the UK is facing are due to global factors rather than domestic consumer overspending. The Bank of England needs to walk a fine line between trying to manage inflation whilst not slowing the economy too much. Another factor is the response of other central banks around the world to inflationary pressures which is having an impact on the value of the Great British Pound.”