More interest rate rises risk 'unnecessary pain'

FURTHER rises in interest rates risk hurting the weakened economy and adding unnecessary pain to already stretched households, a Bank of England policymaker has warned.

 

Swati Dhingra – one of nine members of the Bank’s rate-setting committee – said ‘overtightening’ of interest rates poses more of a risk to the economy than homegrown inflation pressures, such as wage rises. In a speech at the Resolution Foundation think tank, Ms Dhingra said she believes rates should remain on hold at 4% while the flurry of hikes since the end of 2021 filter down to the economy and as inflation begins to ease.