An ex-Bank of England economist has told theipaper the Conservatives made a “mistake” after the 2008 global financial crisis by not taking advantage of ultra-low rates to build truly affordable social homes 🔴 Exclusive Victoria_Spratt
– particularly those who have bought at the top of the market with large mortgages in recent years or the millions of mortgage holders coming off of lower fixed rates.. “A group of people who have bought houses recently or who come off fixed rates and find that their payments have been increased very rapidly will really struggle.”
“The question I am raising is whether it is the right thing for the Bank of England to keep going further on interest rate rises in order to tackle inflation,” she added. “Can we tackle this inflation problem by putting so much weight on interest rates?” Dame Barker has added her voice to a growing chorus of concern – which included the likes of Andy Haldane, the Bank of England’s former chief economist – that the Government and the Bank are placing too much emphasis on monetary policy via rate hikes to bring inflation down. Indeed, Mr Haldane has referred to rate hikes as a form of
Instead of relying on the Bank to raise interest rates further, Dame Barker thinks the Government should consider fiscal alternatives such as tax rises to combat inflation.. “But now we have a group of people – mortgage holders – who are very constrained, and we ought to look at how to share the pain amongst people who are better off.”“Ideally you would put up taxes on spending,” Dame Barker said. “But the difficulty is that this can affect people further down the income scale.
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