The Governor of the Bank of England has warned that interest rates may have to be raised even higher than initially expected to tackle inflation. Andrew Bailey said Bank officials will “not hesitate” to raise interest rates if necessary, while warning that a “stronger” response than previously anticipated could be required.
Public comments by Mr Bailey have taken on increased significance in recent weeks, after the government’s mini-budget spooked the markets, sent the pound plummeting and forced the independent Bank of England to intervene in a bid to restore financial stability. It comes as the governor revealed that he spoke to new chancellor Jeremy Hunt on Friday and had an “immediate meeting of minds”.
Mr Hunt has been given the task of rethinking the government's approach to growing the economy after former chancellor Kwasi Kwarteng’s tax-cutting budget triggered market turmoil, eventually resulting in him being sacked by Liz Truss. It will now be up to the new chancellor to deliver the government’s fiscal plan at the end of the month.
