Inflation and Interest Rates

Inflation is now getting to critical levels. This blog has repeatedly taken the side of those who think it is time to start raising Bank Rate. A quarter point rise was due some while back. Now a half point is needed. Interest rates would remain historically low, but a signal would go out that inflation will not be allowed to get a grip. There are serious doubts that the only reason for inflation is outside factors, outside the Bank of England’s control. Whatever the cause, its remit is to control inflation. It has a lever, the level interest rates, and its own credibility requires it to use that lever very soon.