The head of the Bank of England – responsible for the rise in interest rates – has said it never feels good for central bankers to raise rates but it is their job.
Asked how it feels to be doling out the medicine of interest rate rises, in an effort to reduce inflation, Andrew Bailey said it never feels good for central bankers but it is their job.
Speaking to Sky News data and economics editor Ed Conway, Mr Bailey said he was doing so to bring down inflation, and that if actions weren’t taken, things would get worse.
“Much bigger” job losses could result, he said, explaining that it was critical the Bank takes action.
He denied accusations that the rate rises are bringing about a recession, saying such a statement was unfair. Instead, Mr Bailey placed the blame on economics shocks, the war in Ukraine and high gas and goods prices.
For mortgage holders whose rates have risen the governor said the market rates are too high. More mortgage products should return to the market, he added.
His comments come after the Bank unveiled the biggest interest rate hike for three decades. It raised the base rate of interest by 0.75 percentage points to 3% and said that the UK is already in recession.
More on Bank Of England Related Topics: Bank Of EnglandCost of livingInterest RatesUK economyIt warned that the UK could face a protracted contraction in the coming years, with high inflation and the unemployment rate climbing to 6.5% – the highest since the financial crisis.
The length of its forecasted recession – eight successive quarters in which gross domestic product shrinks – would make it the most protracted since comparable records began but less deep than most previous downturns, including during the financial crash and the 1980s.
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