Rolling coverage of the latest economic and financial news
- Labour piles pressure on Sunak with plan to prevent ‘mortgage catastrophe’
- 1.4m UK mortgage holders face 20% hit to disposable income from rate hikes
Foreign Secretary James Cleverly has hit out at suggestions that the UK should intentionally enter a recession to dampen inflation.
Speaking to Sky News, he said the Government remained committed to cutting inflation but that triggering a recession was not the answer.
“What we need to do is we need to grow the economy.
“High interest rates don’t help with that. This idea that we should consciously be going into recession I don’t think is one that anyone in government would be comfortable subscribing to at all.”
“The Prime Minister is absolutely committed to halving inflation this year and we’re also making sure that we support those people who are struggling to pay the bills, and we’re also putting pressure on the lending industry, the banking industry, to make sure they do the right thing by their customers and help anyone that is struggling or is at risk of default.
“So, we’re dealing with the here and now, but we’re also dealing with the future.”
Despite higher than expected inflation data this week we still believe the majority of MPC members will favour a 25bps hike, with only one or two members voting for a 50bps move, mostly likely Catherine Mann and/or Jonathan Haskel….
Policymakers are mindful that there is considerable policy tightening in the pipeline already as fixed rate mortgages struck in 2020 and 2021 refix to higher rates. The next 3 months will see a particularly large number of mortgages resetting.
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