More interest rate rises coming

"I have the impression that the Bank of England is doing something, even if it's potentially the wrong thing, because it can't be seen to be doing nothing. Interest rate rises control inflation by taking money out of people's, and companies', pockets. However, the main drivers of inflation currently are essentials such as food, fuel and energy. How is making borrowing more costly going to control price rises on these? Are people going to stop buying them, or markedly reduce their spending on them? I can't see how. Small businesses up and down the land have had to shoulder lockdowns, global supply chain issues and staffing issues, not to mention the ever-present threat of Amazon and the like decimating their markets like locusts in a corn field. Now they are potentially being asked to pay even higher costs on their outstanding borrowing, too. You'd start to feel like the Government was trying its hardest to force you out of business."

"It's obvious that rates are going to rise further, but the economy couldn't likely cope with quick, sharp-shock increases; it is likely to be more gradual. In the US, the FED has already countered fears of supersized hikes. In the UK, so much is at stake. You have those borrowed-to-a-hilt who are starkly at risk, and the Bank of England knows it. Inflation does need to be controlled, but we are coming out of a pandemic and a war in Europe isn't helping. We are likely to see more Government and central bank fire-fighting in the months ahead. I wouldn't say a half-percent increase is off the table."

"Central banks raise base rates to dampen demand in an overheating economy. This is not were our economy is and further rate rises may well push us into a recession. Raising the base rate is not going to control the cost of energy or fuel, nor will it stop the war in Ukraine, the main reasons behind the current inflation issue."

"There's no doubt that interest rates will continue to rise and the impact will hit people in different ways. For savers, it's neglible. Whatever gains are made from higher interest rates will be wiped out by inflation. Borrowers on fixed rates can breathe a big sigh of relief, at least until any existing deal comes to an end. The real pain will be felt by businesses and individuals with variable rate loans, overdrafts and credit cards. A half percent rise, which is now very possible, could really eat in to disposable income, so it's time to look at restructuring debt to mitigate the inevitable."

"Nobody said being the Bank of England’s chief economist was going to be easy. Some might say he has a bitter 'Pill' to swallow. Rates are going up and need to be going up. He is paid to be making these tough decisions. Although we have seen a lot of increases recently, if that is what it takes to protect our long-term interests, then we need to support it."