Interest rates are an inherently blunt tool — they come with unfortunate and imprecise time lags. But they remain our best device for bringing inflation down, contributing to economic stability and ultimately prosperity.
Inflation has proved more problematic than first hoped, with yesterday’s surprise rise to 10.4 per cent nearly a point higher than expectations. Interest rates are thus likely to rise in the future, and with them people’s mortgage repayments. The pain is exacerbated by the ever-rising tax burden.
