IEA Economics Fellow responds to interest rate increase
3 November 2022
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Harrison Griffiths writes in CapX
3 November 2022
Energy and Environment
Housing and Planning
Responding to the Bank of England Monetary Policy Committee’s decision to raise the Bank Rate to three per cent, Chairman of the Shadow Monetary Policy Committee and IEA Economics Fellow Andrew Lilico said:
“A 0.75 per cent rise in Bank Rate is about right in current circumstances. The Bank needs to keep pace with international rate rises and some normalisation in rates will be healthy for the long-term growth of the economy. But monetary growth is quite low so inflation should return to target in due course without a need for rates to rise more than a little further.
“We should anticipate more rises to come but the Bank will need to manage down expectations about the peak, so as not to lurch from policy that was too loose in 2021 to policy that was too tight in 2023.”
ENDS
Notes to editors
Contact: media@iea.org.uk / 07763 365520
IEA spokespeople are available for interview and further comment.
Shadow Monetary Policy Committee minutes: October 2022
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
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