Interest rate hike will damage economy while doing little to fight inflation - New Economics Foundation

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The New Economics Foundation reacts to today’s interest rate decision The New Economics Foundation (NEF) has reacted to the Bank of England’s decision to raise interest rates to 4%. “ Raising interest rates risks damaging the economy while doing little to fight the inflation we face, which is driven by international fossil-fuel prices. This act of economic self-harm is the result of inflation management having been entirely outsourced to the Bank of England, with the interest rate as its only tool. It should be a top priority for the government to move towards better coordination of monetary and fiscal policy with the Bank, otherwise the prime minister will find that his ambitions are continually undermined by unnecessarily high borrowing costs.