The UK's leading progressive thinktank, IPPR, has responded to the announcement that the Bank of England has raised UK interest rates to their highest level for 14 years as it has just lifted them for the tenth time in a row, increasing them by half a percentage point to 4 per cent.
Carys Roberts, executive director at IPPR, said:
While inflation now looks to have likely peaked, other lights are flashing red on the economic dashboard. Tighter financial conditions are hitting the real economy and this week's dire growth projections show that signs of a soft-landing look doubtful.
The Bank of England's decision yesterday was also made on the back of issues around workforce shrinkage. We know that this is also down to factors far away from monetary policy, such as the UK's poor overall health - driven by an NHS in crisis, worsening mental health and our poor record on preventing avoidable illness.
Only by addressing wider gaps in public services that are making it harder for people to return to the workforce can we get a handle on labour market issues that determine how high and how long this inflationary period lasts.