Responding to the Bank of England’s decision to raise interest rates to 0.75%, Fran Boait, executive director of Positive Money said:
“With little evidence of domestic inflationary pressure, the Bank of England has today taken an unnecessary risk in raising interest rates while the economy remains weak.
“Though the Bank of England does need to be doing more to curb credit bubbles and asset price inflation, small interest rate hikes are the wrong tool at this time. The worrying state of household finances and the structural weakness of the economy will have to be fixed first, before the Bank has room to meaningfully tighten monetary policy.
“To offset the risks of rising rates, the Bank of England needs new policy tools which would boost the productive economy and allow households to pay down debts, such as overt monetary financing, or ‘QE for People’.”
About Positive Money
Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters.