Monetary Policy

IEA Economics Fellow responds to interest rate increase



Harrison Griffiths writes in CapX

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.”


Notes to editors

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IEA spokespeople are available for interview and further comment.

Shadow Monetary Policy Committee minutes: October 2022

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