Should the Bank of England raise rates?

"Should the Bank of England raise interest rates? Without a shadow of a doubt, yes. Can consumers and households afford it? No, far from it. While logic dictates the Bank of England should raise rates to rein in inflation, restrict borrowing and increase saving, it doesn't address the basic issue that, due to extravagant lending over the past 15 years, the majority of people can't actually afford to flick the debt switch off. Households are so leveraged that rate rises, even small ones, have the ability to cripple people financially. They're hanging over the average household like the Sword of Damocles and the Monetary Policy Committee knows it. Ever since the Global Financial Crisis of 2007/08 and the arrival of Quantitative Easing, Threadneedle Street has created a synthetic booming economy. The banks have been lending phenomenal amounts of printed money, creating excessive debt, allowing consumers to buy whatever they want, and buy it now. This has led to inflation getting out of control and now, with the war in Ukraine causing the price of oil to surge, individual households have been left 'in the cold' metaphorically and literally. The Bank of England is in an almost impossible position."

"Increasing interest rates to control inflation is the wrong policy at the wrong time. Current UK inflation is primarily being driven by external international factors such as rising gas and oil prices and Chinese supply issues due to Covid. Hence, trying to dampen domestic demand, and therefore inflation, by increasing interest rates seems naive at best. The cost of living crisis will more than dampen UK consumer demand. And UK consumers don't need a double whammy of rising mortgage payments and rising bills."

"I've seen the likely interest rate rise being described as 'headwinds' by a number of people, which is odd as battling rising costs for the average small business feels like trying to control a hurricane. We'll keep our chins up and try to stay positive but I implore the Government to do more to help as the next 'headwind' will be the number of SMEs going bust."

"Energy price rises, fuel price rises, tax increases, food price rises, seemingly everything is on the way up. But the issue is that the biggest price increases are on essentials, not things we choose to buy. So is adding to what is widely touted as the biggest decrease in our standard of living for decades by increasing interest rates really that helpful? Inflation isn't rising because we're all feeling flush and spending our money on luxuries, it's rising because the essentials of modern life are all skyrocketing. Fingers crossed that the Monetary Policy Committee see that and don't add to the misery, as increasing people's mortgage payments isn't going to bring down the price of petrol."