It’s an economic disaster! The Bank of England has fumbled the bag and doomed us all - the UK economy is heading for a big crash! Or so you might be forgiven for thinking given some of the reaction to today’s announcement from the ONS that inflation has risen for the first time this year. It has crept up above the Bank of England’s target of 2 per cent to 2.2 per cent. While this is obviously less than ideal from the Bank’s perspective, there is absolutely nothing to worry about.
It’s important to point out that the Bank’s MPC is not to blame for this. The past two years have been characterised by the MPC’s repeated failures as it initially ignored the warning signs and allowed inflation to get out of control which plunged millions of households deeper into poverty. It then attempted to claw back some credibility by hiking interest rates too far and keeping them there for far too long. This has likely caused a great deal of damage to the country’s economy, the full extent of which will become clear in the coming months and years.
