It will be terribly painful for those of us with mortgages but the Bank of England has done the right thing. Interest rates in the UK are now 5.75%; and they will almost certainly hit 6% before the end of the year. The real question is why the Bank didn’t act any sooner.
Inflation has remained far too high for too long: the broadest measure, the retail price index, shows that prices are up 4.3% over the past year. For many people, especially middle class consumers with children and who live in big cities, the real rate of inflation is far higher, as Martin pointed out recently.
Even on Gordon Brown’s debased measure of inflation, the consumer price index, Britain’s record is poor compared to that of other large European countries. CPI inflation is 2.5% in Britain, against just 1.1% in France, 1.9% in Germany, 1.6% in Italy and 1.9% for the euro zone.
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in