The Bank of England governor, Andrew Bailey, has come under fire for failing to predict prices would would increase by so much and for not acting sooner to tame inflation. Although Russia’s invasion of Ukraine fuelled price rises in other parts of the world as energy costs soared, inflation has since slowed in many parts of Europe and the US. In the UK, however, it has remained stubbornly high.
The result of persistently high inflation is that the Bank has rapidly raised interest rates, from 0.1% in December 2021 to 5% on Thursday, causing panic among millions of homeowners facing the prospect of sharply higher borrowing costs.
