Is it the only weapon in the Bank's arsenal? - Comment on the BoE interest rate decision from Richard Pike at Phoebus Software

03 November 2022

Richard Pike, Phoebus Software chief sales and marketing officer, says “Today’s increase may be the biggest single rise since 1989, but it was also the worst kept secret. It is, however, in line with The Fed, announced yesterday, and as such is a global trend that we are all learning to live with. Bringing inflation under control is difficult at the best of times, but when the price of oil and gas continues to rise and the war in Ukraine affects the movement of goods around the world, you have to ask if it is the only weapon in the bank’s arsenal?

“Without knowing what will come out of the autumn statement the MPC are, to a degree, shooting in the dark and borrowers are taking the brunt of their decisions. Swap rates are dropping and lenders may have already factored in this latest rise in the base rate. However, this is not going to be the last increase and borrowers will certainly see their mortgage interest rates increasing over the next few months. The housing market is, I think, heading into a period of stagnation as we wait to see whether the current strategy has any effect on our rising inflation.”