CBI responds to latest UK interest rate decision

Alpesh Paleja, CBI Lead Economist, said: 

“The Bank of England’s latest rate rise is the biggest in 27 years, and follows in the footsteps of strong tightening by other central banks. It underscores the seriousness of our inflation problem, but also demonstrates the MPC’s willingness to act in response.

“Despite early signs of some pipeline price pressures fading, it’s clear that we’re in for a hard winter. With another hefty rise in Ofgem’s energy price cap looming, support for the most vulnerable households and businesses should be kept under review.

“Monetary policy is the first line of defence against inflation, yet building resilience to future price shocks requires a concrete plan for economic growth. So the new Prime Minister must prioritise boosting productivity through greater business investment via incentives and business rate reforms. Meanwhile, investing in energy efficiency can support people struggling with the cost-of-living crisis”.