The British Prime Minister said this Sunday that the Government has “a plan that will work” to lower inflation from 8.7% in the United Kingdom, supporting the Bank of England in raising interest rates to 5%.
In an interview with the BBC, Rishi Sunak was asked about the latest move by the Bank of England’s Monetary Policy Committee, which announced a half-point hike in interest rates to the highest level since 2008 on Thursday.
“I think the Bank of England record, including that of the Governor [Andrew Bailey]over a long period of time, it has been supported by proper inflation management and people must be confident that inflation will come down to target [de 2%]”, he indicated.
The British Prime Minister reiterated that the bank has his “full support” and stressed that “there is no other alternative than to reduce inflation”, which is at “historically high levels”, according to the National Statistics Agency (ONS, for its acronym in English).
The president of the Board of Directors admitted that the decision to raise interest rates was difficult and “unpopular”, although he said that “it is the right thing for the country in the long term.”
“I never said it wasn’t going to be difficult, but I want to reassure people that we have a plan, that the plan will work and that we will get through it,” Sunak said, reiterating that “interest rates are a consequence of high inflation.”
In this sense, the leader of the conservative party also pointed out that “we must be very clear that what harms citizens, what creates challenges in their daily lives and in their budgets, is inflation.”
Considering the latest economic indicators, analysts anticipate that the rates would reach 6% by the beginning of 2024 — which would be the highest level of the last two decades – or that, in turn, triggered recessions as to the consequences of the increase in mortgage costs. in the country.
The UK’s Institute for Fiscal Studies (IFS), an influential British think tank, has warned that rising interest rates could see the roughly 1.4 million Britons with mortgages lose 20% of their disposable income. .
Source: TSF
