London, 4 August 2022 – Today, the Bank of England’s Monetary Policy Committee (MPC) raised interest rates to 1.75% – up from 1.25%. This marks the biggest single increase in the MPC’s 25-year history.
Responding to the MPC’s decision, Danisha Kazi, a senior economist at research and campaign group Positive Money said:
“Trying to tame inflation by raising interest rates is like sticking a plaster on a broken bone: it completely misdiagnoses the problem.
“The inflation we’re currently seeing is driven by volatile oil and gas prices, exacerbated by the war in Ukraine, and our overdependence on these fossil fuels has left us powerless to bring energy prices down.
“To ease the fuel poverty families face now, the government must swiftly act to provide direct support for households in need and prevent the energy price cap rising again in October. To ensure future price stability the government and the Bank of England must work together to direct funds away from fossil fuels and towards renewables, so we’re no longer so exposed to these global supply shocks.”